Coroner Service
	 — 
	Question

Baroness Miller of Chilthorne Domer: To ask Her Majesty's Government what responses they have received on the draft charter for the coroner service from organisations that represent the bereaved, and whether they anticipate making any substantial changes before they publish the charter.

Lord McNally: My Lords, the Government received 135 consultation responses, of which 16 were from organisations representing the bereaved. We are concurrently considering these responses, and we intend to publish our response to the consultation in December.

Baroness Miller of Chilthorne Domer: My Lords, the Minister will remember that the idea of the charter was that it would create a standard of service for bereaved people. He will be aware that the Government now propose a general charter for anyone coming into contact with the coroner service. What does he say to the likes of the father of Adrian Pullman, now himself dying of cancer, who has waited eight years for an inquest into why his five year-old only son was found dead in a swimming pool on a local authority care break? Does the Minister recall that in 2009, when we debated the Coroners and Justice Act, the coroner's office involved said, "We have a lot of cases but this will be given a bit of priority because of the delay, but I cannot foresee it being heard before the end of the year"? It has still not been heard. Can the Minister say what in the Government's revised proposals would mean that a bereaved father no longer had to wait eight years for an inquest?

Lord McNally: My Lords, let us be clear that in a system such as this delays are sometimes unavoidable; for example, because of ongoing criminal or other investigations or, in some cases, because of the family's wishes. We want to ensure as efficient a system as possible. As part of that, we believe that the measures in the Coroners and Justice Act 2009 which we are implementing will help to reduce delays. We will also publish a wider range of statistics about the coroner system than we presently collect, drawing on our experience of service personnel inquests, where the quarterly publication of statistics has helped to eliminate delays throughout England and Wales.

Baroness Finlay of Llandaff: My Lords, how many complaints were received last year about the proceedings and delays in the coroners' courts and how are they informing the revision of the charter, given that some coroners feel that the aspirations set in the charter are unrealistic in situations such as when a second post-mortem needs to be performed?

Lord McNally: I do not have those figures, but I will write to the noble Baroness. Everything we have done in studying this process is aimed at improving the efficiency of the system. I do not think that the simple removal from the reforms of the single post of chief coroner removes the fact that we are implementing the Coroners and Justice Act 2009. We have reviewed very thoroughly. We have consulted very thoroughly, as the noble Baroness knows very well, and we believe that our reforms will bring the improvements that the original Act sought to do.

Lord Bach: My Lords, just two years ago, the consensus in this House and in the other place was that the chief coroner was an essential part of a new coronial system. In spite of the views of this House, and of many outside, including the Royal British Legion, why are the Government still insistent on not appointing a chief coroner, who would be an important part of the reforms that Parliament agreed by consensus?

Lord McNally: A Government is allowed to look at an issue, examine widely, listen, consult, and then make a decision in the context of the financial circumstances it finds at the end. My right honourable friend the Lord Chancellor has decided that the immediate appointment of a chief coroner is not justified in the present circumstances. After listening to the various representations, we left the title of chief coroner in Schedule 5 to the Bill when it returned from the other place, and that will allow this House, the other place and the outside organisations to judge whether we are still able to carry through the bulk of the 2009 Act without the chief coroner. We believe we can, and by our deeds you can judge us.

Lord Thomas of Gresford: The charter will not be statutory so how will it be enforced?

Lord McNally: The Coroners and Justice Act 2009 provides for the Lord Chancellor to issue statutory guidance about the way in which the system operates, specifically in relation to bereaved families. We plan to revise the charter when we implement the coroner provisions in the Act and at that stage we will give the revised charter the status of statutory guidance.

The Lord Bishop of Bath and Wells: My Lords, in view of the Government's declared objective of putting the bereaved at the heart of the inquest process, will the charter make provision for the special circumstances affecting communication with families whose loved ones have died in the custody of the state, and will it take into account the submissions made by the organisation INQUEST?

Lord McNally: Indeed, we have been in regular contact with INQUEST and those are exactly the kinds of issues for which we hope the new charter will enable the bereaved to have direct redress if problems arise. Let us be clear: as much as the previous Government, we want an efficient coroner service that allows bereaved people full information about a process which is always going to be stressful. It really is our full intention to try to make this system work along the main lines of the 2009 Act, but without a chief coroner.

Lord Rooker: Does the Minister accept that the Question asked by the noble Baroness was a first-class use of Question Time in bringing a long-standing individual grievance to the Floor of Parliament? Without knowing anything about the circumstances, would it not have been appropriate for the Minister at least to have said that he will go away and look into this?

Lord McNally: It may have been. I am not so sure that it is a proper use of Question Time to expect the Minister to know about an individual, personal case, which I fully understand for the individuals concerned must be extremely serious. One of the things that I do, as the noble Lord probably did as a Minister, is have a washing-up session after Question Time to see what needs to be followed up. However, I do not intend ever at this Dispatch Box to use personal cases either for attack or defence.

Baroness Farrington of Ribbleton: My Lords, will the Minister explain to the House how the Government determine priorities? We are talking here about a consensus across the other place and your Lordships' House on the importance of this post. The issue has been raised by the noble Baroness, Lady Miller, on many occasions in this House. Yet, the Government pray in aid being careful with money while railroading through police and crime commissioners, who will cost millions and for whom there is no consensus outside. Where are the Government's priorities when it comes to this sort of issue?

Lord McNally: I have already explained the process. I do not think that the noble Baroness, Lady Finlay, my noble friend Lady Miller or other noble Lords have said that the Government have not been available to discuss matters or to go through the process with them. Just as when the noble Baroness was a member of the previous Government, the Government are entitled to make a judgment on a matter and to put it to the House. This matter will return to this place and the House will then have to make a decision. It is simply not true that we have not listened. We have made substantial changes to the implementation of the Coroners and Justice Act, so much so that I believe that I can stand up the claim that we are implementing the bulk of the 2009 Act. But our judgment is that a chief coroner is not needed in post at this moment. We have left it in the Bill so that a judgment can be made at a later stage. But at this stage the Government's judgment is that we should not go ahead with a chief coroner. At a later stage, when the Bill returns to the House, I will defend that position.

Health: Funding
	 — 
	Question

Lord Roberts of Llandudno: To ask Her Majesty's Government whether they will take action to ensure that there is no delay in funding medical treatment in hospitals in England for residents of Wales, Scotland and Northern Ireland.

Earl Howe: My Lords, in the future it will be the role of the NHS Commissioning Board to act as the steward of NHS resources in England, including managing the structure of payments for NHS services. During the transition to the new NHS structure, officials from the Department of Health are working with colleagues from the devolved Administrations to understand and resolve any issues which are arising as the result of the devolution of the responsibility for healthcare.

Lord Roberts of Llandudno: I thank the Minister for that reply. Will he give us an assurance that no person needing medical attention, wherever they are in the United Kingdom, shall be denied the very best attention possible, and that in order to facilitate that-and I have some indication that this is already happening-there should be immediate discussions between the devolved health administrations and here to make sure that neither funding nor procedure nor anything else will prevent the best treatment for patients wherever they are in this kingdom?

Earl Howe: I fully agree with my noble friend that the same principles should apply across the United Kingdom as regards access to NHS treatment and facilities. The majority of cross-border flows occur in relation to Welsh patients coming in to England, and I am not aware that there are particular problems there. The Department of Health and the Welsh Government have agreed a protocol for cross-border healthcare commissioning, to define commissioning and payment arrangements for those living along the border. I believe that that is working well.

Lord Wigley: My Lords, is the Minister aware that there are numerous cross-border issues between the north Wales area and the Liverpool and Manchester area, where many people get their services and treatments? Is he aware that the NHS policy changes currently being pursued in England are estimated to have a knock-on negative effect of no less than £11.5 million on the Betsi Cadwaladr health board, which serves the north Wales area? In those circumstances, is it not imperative that the health departments in Wales and England work together very closely indeed so that our health board can plan safe and sustainable services for all the people living in north Wales?

Earl Howe: Yes, I agree with the noble Lord. It is important that officials from both Wales and England have a dialogue to ensure that problems do not arise of the kind that the noble Lord refers to. Having said which, I repeat that the protocol that currently exists, and the funding that we in England give to the Welsh Government to compensate for differences in prices between either side of the border, serve to ensure that patients are treated promptly and as they should be.

Lord Jones: Does the Minister fully comprehend that the border between England and Wales is over 200 miles long; that the bulk of the population of Wales is in the east; and that historically there has always been access-for example, from north-east Wales-to the great hospitals of Christie in Manchester, Broadgreen in Liverpool and Alder Hey in Wirral? Does he fully comprehend the current anxiety? It is the wish of the mass of the population that they should have access to these hospitals-hospitals of access and excellence-and that Ministers in England should take a generous and understanding attitude to the wishes of a population who have always had access to the excellence of these great hospitals, of which the people of north-east Wales are very fond.

Earl Howe: My Lords, I appreciate everything that the noble Lord has said. He may like to know that the protocol to which I have referred states as follows:
	"The patient's safety and well-being must be paramount at all times. No treatment must be refused or delayed due to uncertainty or ambiguity as to which"-
	local health board or PCT-
	"is responsible for funding the healthcare provision".
	I think that that should give patients in Wales every reassurance.

Lord Elystan-Morgan: My Lords, does the Minister accept that there is one very specific matter in relation to transborder matters in Wales, and that is in relation to Powys? Despite strategic policy decisions of many years ago, Powys has never had a district general hospital, with the result that there is a very considerable flow from north-east Powys to hospitals in the Shrewsbury and Telford area. Will he give an undertaking that, whatever happens, that system will continue?

Earl Howe: My Lords, nothing in the Government's plans will impede the flow of Welsh patients into England. I can give the noble Lord that reassurance.

Baroness Randerson: The increased sensitivity to local needs which will be created by the reorganisation of the health service is to be welcomed, but in practice there will be more organisations involved which will need to co-operate. Does the Minister agree that this will need strong ministerial guidance for all affected organisations to follow if individual patients are not to suffer delays?

Earl Howe: I agree with my noble friend. The NHS Commissioning Board will have a duty to consider the likely impact of commissioning decisions on the provision of health services to people living close to the border with England, wherever they may be.

Lord Foulkes of Cumnock: Did I catch the Minister's first answer right-did he say that it would be the new head of commissioning who would have this responsibility? Am I right in saying that this is the professor who was described by MPs as not having the experience necessary and not understanding the job of head of commissioning, and who was only approved by the committee in the House of Commons on the casting vote of the chairman? Is this the guy who is going to be responsible?

Earl Howe: My Lords, the chief executive-designate of the NHS Commissioning Board is Sir David Nicholson, who is currently chief executive of the NHS. He is not the gentleman to whom the noble Lord referred. He currently runs the NHS. Professor Malcolm Grant, to whom I think the noble Lord was referring, will be chairman of the NHS Commissioning Board Authority, in a non-executive capacity.

Baroness Thornton: My Lords, I think it is time that we brought Scotland, Wales and Northern Ireland into this Question, since they are actually part of the Question. So, on behalf of the rest of the UK, it is my understanding that essentially the same responsibilities and powers rest on the Secretary of State in England and the Ministers of Health in Scotland and in Wales. My question to the Minister is how do the Government intend to reconcile, manage and co-ordinate accountability to patients on cross-border concerns?

Earl Howe: My Lords, the accountability is currently, as the noble Baroness will know, fairly complicated. Patients who are resident in England are the responsibility of their local PCT and patients with a Welsh GP are the responsibility of the Welsh local health board. That leads to an anomaly where patients who are resident in England but who have a Welsh GP are the legal responsibility of two commissioners, while patients resident in Wales with an English GP are not the responsibility of any commissioner. The situation is much clearer in Scotland because patients resident in Scotland but registered with an English GP are the responsibility of Scotland, and that is very clear. None of that will change as a result of the Government's reforms.

Legal System: Translation and Interpreting Services
	 — 
	Question

Baroness Coussins: To ask Her Majesty's Government what assessment they have made of the provision of translation and interpreting services for the legal system in the United Kingdom.

Baroness Coussins: My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare interests as chair of the All-Party Parliamentary Group on Modern Languages and honorary fellow of the Chartered Institute of Linguists.

Lord McNally: My Lords, the Ministry of Justice has been looking at this matter for some time and has identified a number of issues that call for change. They include the limited number of linguists available for use, an inefficient and costly booking process, and concerns over the quality of service and complaint investigation. The ministry has therefore announced that it will be moving to a framework agreement with a single supplier. We anticipate that this will resolve current problems while saving the taxpayer at least £18 million a year on current spending.

Baroness Coussins: I thank the Minister for his reply, but would he be prepared to review the framework contract in the light of an independent study commissioned by the Association of Police and Court Interpreters, which predicts that the new arrangement is unsustainable and, far from saving £18 million a year, could end up costing £200 million a year? Secondly, is the Minister aware that more than half the existing number of qualified interpreters have refused to sign up with the new single supplier and take very substantial pay cuts, and that this situation could well result in the employment of less competent interpreters, to the detriment of witnesses, defendants and victims?

Lord McNally: No, we will not review the framework or the agreement that we have made. We have looked at the report-which, in any lobbying exercise, is quite legitimate-and examined the figures in it, but we do not believe that they stand up. We have always been clear that translation and interpretation services of the appropriate quality should be available, where they are required, for all those who come into contact with the justice system, while obtaining value for money for the public. Let us see how it settles. There are many threats and ideas that people are not going to sign up or that it will not work out. Obviously the noble Baroness is far more expert than me on this issue, but there is no doubt that the present system was not working, which is why the previous Administration initiated the inquiry, which has now culminated in this decision, as far back as 2009.

Lord Avebury: My Lords, in designing the new system, why was it decided to ignore existing professional qualifications and to sideline the National Register of Public Service Interpreters, with its established system of registration that requires not only an appropriate degree-level qualification but 400 hours of proven public service interpreting? Does my noble friend think that it is fair to make experienced and qualified interpreters and translators go through the hoops and pay for a new accreditation procedure that assumes that they have just come out of the sixth form?

Lord McNally: My Lords, we are not doing this for fun. We are doing it because the present accreditation system was not working and there was a lot wrong with it. That is why we set up a new register. There were faults in the old register in the quality of assessment and we believe that, starting as we are with a new system, a new register is the most effective way of guaranteeing quality.

Lord Kinnock: My Lords, no one is arguing for simple maintenance of the status quo. When over half of the qualified people in this profession have made it clear that they are unwilling to register with a new body under the new framework because it implies cuts of up to 70 per cent of their incomes, does the Minister not think that the Government are taking a huge risk by pursuing this course without further review and that it will result in loss of quality, compromise justice-which is worst of all-and could end up ultimately, as the professionals warn, costing much more and not reducing costs?

Lord McNally: The noble Lord has listed all the campaign slogans, as it were.

Noble Lords: Oh!

Lord McNally: The fact is that the old system was extraordinarily inefficient. Sometimes interpreters would get only one appointment in a week. Sometimes interpreters would not turn up, incurring costs to the court. Sometimes interpreters would subcontract to a totally unqualified interpreter. There were a lot of faults in the old system, which is why the previous Administration initiated the inquiry. Having looked at the outcome of that inquiry, we have adopted this new system, providing a new register with a single supplier. Let us see how it works. We have confidence that the system will work, that qualified interpreters will sign up to it and that they will get a volume of work that will give them a decent living.

Lord King of Bridgwater: Can my noble friend confirm, to reassure the British taxpayer, that when Mr Abramovich gives his evidence in Russian and this extensive trial stretches on in whatever language is chosen to conduct it, the cost will not fall on the British taxpayer?

Lord McNally: I will have to write to my noble friend. What I will say to him is that, if it is falling on the British taxpayer, I will put down an amendment to the LASPO Bill to prevent such an absurdity.

Health: Diabetes
	 — 
	Question

Lord Collins of Highbury: To ask Her Majesty's Government what plans they have to act on the nearly 50 per cent rise, since 2005, in the number of people diagnosed with diabetes in the United Kingdom.

Earl Howe: My Lords, the increasing prevalence of diabetes is one of the reasons we remain committed to the NHS health check programme. The programme has the potential to prevent over 4,000 people a year developing type 2 diabetes. We are also continuing to improve treatment and support for diabetes. Earlier this year, NICE published a diabetes quality standard, which provides an authoritative definition of good quality care for use by clinicians and commissioners.

Lord Collins of Highbury: I thank the Minister for his response. I agree that the biggest benefit of the NHS programme is the prevention of diabetes. However, despite its being in place for two years, very few people have heard of it or used it. Will the Minister explain what action he will take to ensure that the scheme is properly provided and promoted? Can he guarantee that such schemes will not be the first casualty of the proposed NHS reforms?

Earl Howe: My Lords, we are completely committed to the NHS health check programme, so I can reassure the noble Lord that we are clear that it has a major part to play. It is a very cost-effective way of both preventing and detecting early those who are at risk of diabetes or who may have recently contracted it. Health checks are part of the current operating framework. It is true that the figures for the first quarter of this year were a little disappointing, but PCTs are fully engaged in the process.

Lord McColl of Dulwich: My Lords, will the Minister acknowledge that the main cause of diabetes is the obesity epidemic, which is due to overeating? Could he suggest to the quango NICE that it withdraw its advice about having a balance between "calories in" and exercise, given that exercise has so little to do with the obesity epidemic? You have to run miles to take a pound of fat off.

Earl Howe: My Lords, my noble friend is to be congratulated on his campaign on this issue. Of course, I agree with him that if you are obese a reduction in "calories in" will make the most difference to regaining a healthy weight. He is absolutely right. If there is a respect in which NICE needs to amend its guidance, I am sure that it will be listening.

Baroness Pitkeathley: In view of the very well established connection between obesity and diabetes, and the associated resulting problems such as amputations, gangrene and so on, does the Minister consider that the Government's policy on obesity is now adequate?

Earl Howe: My Lords, we are clear that obesity is a major problem-we have recently had a number of exchanges in this Chamber about it-and we are committed to promoting active lifestyles. Tackling obesity will support that, as will the health check. We are fully engaged in the Change4Life campaign, which raises awareness of the importance of maintaining a healthy weight and being physically active. The obesity challenge is not capable of being addressed or met by government alone; it is a matter for everybody-a matter for people taking responsibility for their own healthcare. Government and industry have a part to play in food formulation, as do the retail and catering trades. It is an effort across society that will beat obesity.

Baroness Masham of Ilton: My Lords, does the Minister agree that if people cut down on sugar and alcohol it would help? Would he agree that this is a worldwide problem?

Earl Howe: I agree fully with the noble Baroness that sugar and the sugars contained in alcohol are a major feature in the obesity problem and in the incidence of type 2 diabetes.

Lord Rennard: My Lords, will the Minister undertake to look at the report published today by the Primary Care Diabetes Society on keeping people with diabetes out of hospital? Will he agree to look in particular at evidence suggesting that greater provision of insulin pumps or more use of bariatric surgery may be very cost effective to the NHS and, in the wider economic sense, a significant saving to the public purse rather than an expense?

Earl Howe: I shall certainly do so. In relation to insulin pumps, we know that more has to be done to increase the uptake, in line with NICE recommendations. The current operating framework highlights the need to do more to make these devices available. Bariatric surgery should be seen as a last resort, but in some cases it is the right option. It is not an easy option because surgery comes with risks, and anyone undergoing it needs to make significant lifestyle changes. But I am sure that my noble friend's messages are well taken in the medical community.

Baroness Symons of Vernham Dean: My Lords, can the Minister tell us, given that there has been an extraordinary increase in the number of people suffering from diabetes in the past few years, how much of the increase is due to improved diagnosis of people who had diabetes and simply did not know that they had it?

Earl Howe: Certainly, we are picking up more cases of diabetes than we might have done in the past, but my advice is that approximately half the increase that we have seen is due to the changing age and ethnic group structure of the population and half due to higher levels of obesity.

Health and Social Care Act 2008 (Regulated Activities) (Amendment) Regulations 2011
	 — 
	Motion to Approve

Moved By Earl Howe
	That the draft Regulations laid before the House on 10 October be approved.
	Relevant document: 29th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 31 October.
	Motion agreed.

Terrorism Prevention and Investigation Measures Bill

Bill Main Page

Committee (2nd Day)

Relevant documents: 16th and 20th Reports from the Joint Committee on Human Rights, 19th Report from the Delegated Powers Committee, 19th report from the Constitution Committee.
	Clause 26 : Temporary power for imposition of enhanced measures
	Amendment 54
	 Moved by Baroness Hamwee
	54: Clause 26, page 17, line 20, leave out subsection (9)

Baroness Hamwee: My Lords, I shall speak also to Amendments 55, 56, 59 and 63. I would add to that list if it gave noble Lords the opportunity to leave the Chamber before I get to the substantive part of my amendments. All of these amendments take us to the clauses in the Bill dealing with what are called enhanced terrorism prevention and investigation measures-that is, measures which the Secretary of State can introduce during a period between Parliaments when she,
	"is satisfied, on the balance of probabilities",
	that individuals,
	"have been, involved in terrorism-related activity".
	My amendments are particularly directed to the extent of those powers.
	Clause 26(9) provides:
	"A temporary enhanced TPIM order may make appropriate provision (including appropriate variations from the provision contained in the relevant provisions of this Act) in consequence of, or in connection with, the creation ... of the enhanced TPIM power".
	As my noble friend the Minister is aware, my Amendment 54 is particularly directed to understanding what is meant by "appropriate provision". What are the limits of appropriate provision in this context? Does it mean anything in this legislation? That does not seem logical to me because it is there anyway. Does it mean simply up to the boundaries of what is acceptable under the Human Rights Act? What does it mean? I appreciate that as well as the enhanced measure there is an enhanced standard of proof, "the balance of probabilities", for introducing these provisions. I would have read this as a provision on how the measures would be applied-measures including residence, geographical area, association and communication-but the reference to variation from provisions,
	"contained in the relevant provisions of this Act",
	makes me doubt that that can be the correct reading, so what is "appropriate provision" in this context?
	On quite similar lines, Amendment 56 would amend Clause 26(11), which provides that,
	"a temporary enhanced TPIM order includes ... provision amending any enactment".
	That seems a very considerable power and I hope that the Minister can help your Lordships to understand what the Government have in mind. It is hard to think which measures are not in the Bill, apart from imprisonment in a conventional prison without trial or deportation which, while we are past the days of Botany Bay and cannot deport UK citizens, was something else that came to mind. I am pretty stuck as to what that subsection means.
	Amendment 55 is not very elegant. It would, no doubt, have been easier if I had added some commas to it. However, it concerns what is elsewhere in the Bill relating,
	"to standard TPIMs notices ... orders",
	which are,
	"the subject of standard TPIMs notices",
	and "measures", which is the defined term meaning the measures that can be taken under a standard TPIMs notice. I want to be sure that the various procedures which apply to all of those apply to enhanced TPIMs. I think that is the case but I would like to have assurance on that.
	Amendment 63, to which Amendment 59 is consequential, is about commencement and is of course a probing amendment. I am not suggesting postponing the arrangement-at any rate, not at this stage of the Bill-but asking the Minister whether he can give further information to the Committee about the timetable for dealing with the draft legislation for the separate enhanced TPIMs Bill. I know that he said at our last sitting that we will come to pre-legislative scrutiny of that in due course, essentially, although I do not recall which phrase he used. It would be more satisfactory to know what timetable we are working to, so that we all have a context for this Bill. I beg to move.

Lord Henley: My Lords, I thank the noble Baroness, Lady Hamwee, for bringing forward these amendments, which are all essentially probing amendments. I commend her for so doing, as this is what the House does very well. I hope I can respond to and answer most of the points she has made in her four amendments-in fact, there are five, but they are in four batches.
	If I start with Amendment 54, which is about the meaning of "appropriate", I must first describe what subsection (9) does. It provides that a temporary enhanced TPIM order,
	"may make appropriate provision (including appropriate variations from the provision contained in the relevant provisions of this Act) in consequence of, or in connection with, the creation, in accordance with this section, of the enhanced TPIM power".
	We believe that subsection (9) is essential to the clause. It allows the Secretary of State to make the consequent provisions to make sure that the enhanced TPIM regime functions properly, and it allows for equivalent provision to be made, to occur in paragraph 7 of Schedule 2 to the draft enhanced TPIM Bill.
	This specifies that the operation of Schedule 6 to the TPIM Bill, which relates to the retention of DNA, is modified in order to accommodate the ETPIM regime. In particular, it takes account of the fact that the same individual may, at a different time, be subject to both an enhanced TPIM notice and the standard TPIM notice. I hope that my noble friend will accept that.
	Amendment 55 would insert a new clause after subsection (10). The provisions of Clauses 26 and 27 already ensure that the order will apply the provisions of the Bill to the enhanced TPIM regime to the extent that it is appropriate. This includes all the nuts and bolts of the TPIM regime; for example the role of the court, and the way in which the TPIM notices are varied or revoked. The provisions that are not applied to the order are those which are not yet relevant. For example, an enhanced TPIM notice may not be extended for a year under the order, as the order, unlike the enhanced TPIM Bill, only lasts for 90 days and cannot be renewed.
	Amendment 56 would delete the provision allowing the Secretary of State to amend any enactment under the order-making power. The noble Baroness stated that the amendment was not quite as elegant as it ought to be. She may have raised a point that we will certainly consider. At this stage, we want to see whether that provision is necessary; we will come back to the noble Baroness, have discussions with her, and possibly bring forward an amendment on Report.
	Amendments 59 and 63, which are to be taken together, relate to commencement. I think the noble Baroness was really asking not so much about commencement but rather consideration of the draft legislation of the enhanced Bill. Obviously, it must be for the usual channels to decide what is appropriate, which committees are available, and so on. However, I am sure that with discussions between the usual channels-between the Government, the Opposition and others-we will come to the right solution as to how the enhanced TPIM Bill should be considered by this House and another place, or perhaps both together, while bearing in mind the resources available to both Houses. Different noble Lords will have different views on this, to which we will listen in due course, as will the usual channels, as always. I hope those explanations are sufficient for the noble Baroness but if they are not we can discuss them further. However, with that, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Hamwee: My Lords, I thank the Minister for all of that. With regard to his reply on my first amendment, I shall have to take his word for it. That is my failure of concentration, not his failure of explanation. It is certainly a reply that deserves to be read in Hansard as it was quite technical.
	On Clauses 26 and 27 applying to the extent that is appropriate and what is not appropriate, the Minister seemed to give examples rather than a complete reply. I am sure that his brief includes examples for him to give, which is fair enough, but it would be helpful to understand the extent of the point. May I ask him to let me have a complete answer in writing after Committee stage? These clauses are quite difficult to follow. I think I said on the previous day in Committee that a flow chart would be helpful in some cases. Given the powers that the Secretary of State would be granted, it would be appropriate to have as extensive an understanding of what is meant as possible.

Lord Henley: My Lords, whether I can provide a flow chart is one thing but I certainly promise to write to my noble friend so that we can sort these things out between now and Report. At this stage I will just give a commitment to write to her but that commitment does not necessarily extend to providing a flow chart.

Baroness Hamwee: My Lords, I do not think I was asking for a flow chart but I share the Minister's wish to get this sorted out before Report. These issues do not lend themselves terribly easily to debate across the Floor of the Chamber. As regards the enhanced Bill, I hear what the Minister has to say. I thought it was worth continuing to ask the question. I beg leave to withdraw the amendment.
	Amendment 54 withdrawn.
	Amendments 55 and 56 not moved.
	Clause 26 agreed.
	Clauses 27 to 29 agreed.
	Schedules 7 and 8 agreed.
	Clause 30 agreed.
	Amendment 57 not moved.
	Clause 31 : Short title, commencement and extent
	Amendments 58 and 59 not moved.
	Amendment 60
	 Moved by Lord Hunt of Kings Heath
	60: Clause 31, page 21, line 35, leave out from the first "on" to end and insert "such day that the Secretary of State may by order appoint, being a day after 1 January 2013"

Lord Hunt of Kings Heath: My Lords, I shall also speak to my Amendment 61. The heart of the Opposition's concern with the Bill is the worry that the Home Secretary's powers to deal with these very difficult and potentially very damaging cases are being weakened. Nowhere is this more evident than the central issue of relocation without consent. Relocation powers have proved to be extremely useful in disrupting terrorist activity, as has been confirmed by the police on a number of occasions. Indeed, as we discussed on the first day in Committee, the Home Secretary herself argued in May of this year-just a few months ago-in the case of CD that he needed to be removed from Greater London to protect the public from a terrorist attack.
	Ministers have claimed that we need not worry because they will put greater surveillance measures in place of the existing legislative provisions. I again remind the Minister that, in evidence to the Public Bill Committee in the other place, the senior representative of the Metropolitan Police said that to get the resources required so that there will be sufficient surveillance measures in place, to get people trained, and to get the right equipment would take more than a year. The point I put to the Minister is this: it is simply not credible that the security environment has changed so dramatically in the past three to five months that the powers needed then are not needed now.
	With the Olympic year coming up, can the Minister honestly say that the powers are needed less in the coming months than they were needed by this Home Secretary, who has used those powers on five occasions? The Minister has argued that the public can be protected by a less intrusive and more targeted regime. He has talked about the need for this regime to be complemented by additional resources for the police and security services, allowing more surveillance, and it is acknowledged that it will take time for those measures to be put into place.
	My amendment offers a very helpful way forward for the Government. I am suggesting that the new measures are not brought in until 1 January 2013. This will allow us to get through the Olympic year using current legislative provisions. I am also suggesting that Parliament has some reassurance from the terrorism co-ordinator that the additional resources have been provided and, overall, that there can be confidence that the new provisions of this Bill, if enacted, and the additional measures that will need to be brought in in relation to surveillance are fully in place. I think that that is a very good offer from the Opposition; it will allow the Government to reassure both the security services and the police and to ensure stability over the next 15 months. The Government will be able to implement the new measures from 1 January 2013. Surely it will be worth the Government pausing over the next year to get us through the Olympics and then move to the introduction of these provisions. I beg to move.

Baroness Hamwee: My Lords, the noble Lord, Lord Hunt, says that relocation has been very useful in disrupting terrorism activity. The problem I have is that I do not know and I do not know whether he knows. He may well believe that that is the case, but I am not sure that any of us really knows. That has been a difficulty throughout the debate on the Bill.
	I have a couple of points on the drafting of Amendment 61. It seems to me that it slightly muddles accountability. Is it not for the Home Secretary to take the decision on the resources and to take responsibility for what resources are applied, rather than it being an arrangement with the terrorism co-ordinator who, I take it, is the co-ordinator within the Metropolitan Police? I am slightly concerned that the amendment dilutes the responsibility of the Secretary of State. The terrorism co-ordinator of course has a role in this. We have all heard senior police officers say that they will do what they can within the resources provided to them, and they are very cautious about saying that they have enough resources.
	My second point is to ask whether it is possible to identify precisely the right resources and deploy them. That could well be something of a moving feast; the resources required will vary from time to time. I of course understand the concerns that lie behind the noble Lord's amendment, but I am not sure whether it is a practical way of satisfying us all and, indeed, the public.

Lord Pannick: My Lords, I am assuming that the Government are satisfied that the available resources are sufficient to maintain security in this country. If that is not the case, it would be very troubling indeed.

Lord Henley: I thank the noble Lord, Lord Pannick, for that comment. Yes, we are satisfied and it would be very troubling if we were not. Perhaps I may also deal with the brief point made by my noble friend Lady Hamwee about the terrorism co-ordinator. I am assuming that by that term used in the amendment the noble Lord, Lord Hunt, means a senior national co-ordinator for counterterrorism, but I shall let him address that in due course.
	I am grateful for the intervention of my noble friend Lady Hamwee. She emphasised, first, the point of the role of Home Secretary and, secondly, a point that the noble Lord, Lord Hunt, himself addressed-that we should look not just at the Bill on its own but at the Bill plus the additional resources that have been promised. That is the most important matter before the House at this stage. It is not just the Bill that we are talking about, but the whole package that the Government have put forward.
	I thank the noble Lord for his clear explanation of the concerns that lie behind his amendments. I appreciate that he raised the subject of relocation and the case of CD, in which, on that occasion, my right honourable friend the Home Secretary used relocation. However, as I have said, we must look at the package; and it is because the package will be in operation that we believe that relocation will not be so necessary in the future. As the House will be aware, there has been considerable debate over the past few weeks, here and in another place, about the arrangement for the transition from control orders to the new system of TPIMs. These amendments are an attempt to return to the issues raised by amendments tabled in another place and debated at some length on Commons Report.
	The Opposition have been consistent in expressing their concern that the police and the Security Service may not be ready for the commencement of the Bill when the time comes. These amendments, in common with those tabled in another place, are intended to provide reassurance on that point by delaying commencement of the Bill or by making it subject to agreement with the police on the readiness of the significant additional resources that we are providing. However, as my noble friend Lady Hamwee said, that must, in the end, be a matter for the Home Secretary.
	I accept that such concerns, particularly in the run-up to the Olympic Games, are well intended and are born of a concern to deal with matters that relate to the safety of the public. However, I am happy to confirm that I do not believe that they are necessary. As I said in response to the noble Lord, Lord Pannick, the public will be protected by the Bill because we are satisfied that there are sufficient resources available, including in relation to the date on which the Bill comes into force. We believe that the Bill plus the robust package provide the appropriate measures to protect the public, and alongside it there will be considerably increased resources to strengthen covert investigative capacity. We have repeatedly made it clear that for obvious reasons we are not able to provide details of that additional funding or its deployment, and that remains clear. However, we have also been clear-and I am pleased to confirm this again-that we have been in discussion with the police and the Security Service for some months on this matter, and arrangements will be in place to manage effectively the transition from control orders to TPIMs.
	I hope that those assurances are sufficient for the noble Lord. If they are not, we will obviously come back to this matter on Report. However, I hope he will accept that we obviously cannot go into detail on what the resources are, and he would not expect me to do so. However, what I have said should be sufficient to allay his fears and I hope that he will therefore be prepared to withdraw his amendment.

Lord Hunt of Kings Heath: My Lords, I am grateful to the Minister, although I am disappointed by his response. I just refer the noble Baroness, Lady Hamwee, to the evidence given by Deputy Assistant Commissioner Stuart Osborne to the Public Bill Committee when he was asked about the effectiveness or not of relocation orders. He said:
	"The relocation issue has been very useful for us being able to monitor and enforce at the current time. Without that relocation, and depending on where people choose to live, that could be significantly more difficult".-[Official Report, Commons, Terrorism Prevention and Investigation Measures Bill Committee, 21/6/11; col. 5.]
	I agree with the noble Lord, Lord Henley, that it is a question of the Bill plus resources. He said that he is confident that, alongside the provisions of the Bill, sufficient resources are being made available to the police and security forces. Of course, I can only accept the assurance that the noble Lord has given but I simply wonder whether he is wise to move to a new system within a very short period of the Olympics coming to this country. I wonder whether there is not a case for the implementation of this measure being delayed until after the Olympics. That really is the intention behind my amendment, which is meant to be helpful, and I hope that the Government will give it further consideration between now and Report. I beg leave to withdraw the amendment.
	Amendment 60 withdrawn.
	Amendment 61 not moved.
	Amendment 62
	 Moved by Lord Rosser
	62: Clause 31, page 21, line 35, at end insert-
	"( ) This Act expires at the end of the period of one year beginning with the day on which it commences.
	( ) The Secretary of State may, by order, revive the Act if a draft of such an order is laid before and approved by an affirmative resolution of both Houses of Parliament.
	( ) An order made by the Minister under this section is to be made by statutory instrument."

Lord Rosser: My Lords, the purpose of this amendment is to ensure that the Bill and the TPIMs that it sets up require annual renewal, as is the case with the present control order legislation. That legislation is clear in its temporary nature and it has a sunset clause, which requires an annual vote in Parliament to consider whether the powers are still required. The Bill before us makes no provision for a yearly sunset clause but provides for a five-year limit, not requiring a first vote until the end of 2016 or early 2017 if its operative provisions are to continue and not expire.
	Both your Lordships' Constitution Committee and the Joint Committee on Human Rights have queried this provision in the Bill. The Constitution Committee questioned whether it was constitutionally appropriate for the extraordinary executive powers involved in TPIMs to remain in being for a lengthy period of time. The Joint Committee on Human Rights said that it was disappointed by the Government's reluctance to expose their proposed replacement regime for control orders to the rigours of formal and post-legislative scrutiny, which annual renewal would entail. The Joint Committee was of the view that the TPIMs regime was less severe than the control orders regime but still felt that TPIMs remain,
	"an extraordinary departure from ordinary principles of criminal due process".
	The Joint Committee also noted that the UN special rapporteur on the protection of human rights and fundamental freedoms while countering terrorism, in a recent report to the UN Human Rights Council, had observed:
	"Regular review and the use of sunset clauses are best practices helping to ensure that special powers relating to the countering of terrorism are effective and continue to be required, and to help avoid the 'Normalisation' or de facto permanent existence of extraordinary measures".
	The Joint Committee recommended that the Bill should also,
	"require annual renewal and so ensure that there is an annual opportunity for Parliament to scrutinise and debate the continued necessity for such exceptional measures and the way in which they are working in practice".
	In a recent letter responding to your Lordships' Constitution Committee, the Minister in the other place claimed that five-yearly rather than annual renewal would allow the system to operate in a stable and considered way and would allow proper and detailed consideration to take place on whether the legislation was still required. Annual renewal also allows for proper and detailed consideration, and rather more frequently than once every five years. As for the assertion that five-yearly renewal will allow the system to operate in a stable and considered way, that rather suggests that the Government see TPIMs as not far short of a permanent arrangement, despite the exceptional executive powers, including the profound impact they can have on the liberty of some individuals. That is a key reason why annual renewal is necessary-precisely to ensure that these are regarded as temporary and not permanent measures.
	We agree with the Joint Committee on Human Rights. Annual renewal is required for the current control order regime because of the considerable and exceptional executive power that it confers, most of which remains in the current Bill in respect of TPIMs. In addition, we now have the draft enhanced terrorism prevention and investigation measures Bill, which could be brought into being at short notice and which provides further extraordinary executive powers.
	This Bill, like the control orders legislation, covers difficult issues relating to the rule of law. It provides powers to act in cases where prosecution is not possible but where, nevertheless, security concerns about the activities of a small number of individuals are such that it is felt that executive action has to be taken, which considerably restricts liberty through control orders, or in future through TPIMs, when the Secretary of State reasonably believes that the individual is or has been involved in terrorism-related activity. Whatever one's views on the need for control orders or TPIMs, these are considerable and exceptional measures, and for that reason alone it is surely only right and appropriate that Parliament should have the opportunity and the duty to decide each year whether or not the situation remains such that these measures and the associated powers should continue in being or, instead, be allowed to expire. It is surely not appropriate, in view of the profound impact on the liberty of individuals of these exceptional measures and powers-the Minister accepted on Second Reading that they were exceptional-that an important check by Parliament on the exercise of those executive powers, and the continuing necessity for them, should be almost eliminated by permitting Parliament that opportunity to decide whether the situation remains such that they should continue, or be allowed to expire, only once every five years. I beg to move.

Lord Lloyd of Berwick: My Lords, I support the amendment, but I do not hold out much hope that it will do any good. It was different six years ago when the Conservative Party, and Lord Kingsland in particular, were in favour of relaxing, rather than strengthening, the 2005 Bill. Despite that, we argued the toss on renewal every year for six years and achieved precisely nothing. Now the Official Opposition are in favour of strengthening the Bill, and I see no reason to suppose that the Government will themselves be of that view-I hope not. I, therefore, suspect that in debating this matter every year for the next five years we will largely be wasting our breath, though I support the amendment for its symbolic value.

Lord Pannick: My Lords, I, too, support the amendment. I am rather more optimistic that it will do a great deal of good. I agree with what has been said by the noble Lord, Lord Rosser, about the need for an annual review because of the exceptional nature of these powers, and because of the need for Parliament to have the opportunity to consider such matters annually. But there is a further factor. An annual review will surely impose an important discipline on the Government, and this is an area where we inevitably need to trust the Government. It will require Ministers periodically to consider the need for these measures, what they can say to justify them in parliamentary debates and whether or not these measures need an amendment. This is an important discipline, particularly in a context where the factual circumstances that are said to justify these exceptional measures are not going to remain static for as long as the next five years.

Baroness Kennedy of The Shaws: My Lords, I support the amendment. Unlike the noble and learned Lord, Lord Lloyd, I do not think it is pointless. We should always remind ourselves that emergency measures have a way of seeping into the legal system as a whole. We have learned that over time. Often, things that are introduced as emergency measures end up remaining on the statute book for far too long. The fact that we come together and annually review a matter-even if we do not manage to persuade the Government-does mean that the matter is before us, and we are still talking about something that is being used as an exception to the rule. I therefore urge those who are listening to see why this is important, and that we do have the annual review that we have always had in the past.

Lord Faulks: My Lords, these provisions followed a lengthy counterterrorism review and represent the views of the Government as to where the line should be drawn between the necessary powers, by way of TPIMs, and the liberty of the individual. This legislation has been through the other place and is going through your Lordships' House in a thoroughly orthodox way, and the provisions are being carefully scrutinised. TPIMs contain a considerable number of safeguards, which have already been discussed in Committee, and they reflect a considered compromise between the various arguments. The Bill does not represent a response to the immediate crisis, as the 2005 position did, and has not gone through Parliament by way of accelerated procedures; it represents the result of lessons learned.
	The provisions can be repealed by an order-making power or in the way that any other legislation is repealed. It is tempting with extraordinary powers-and I readily concede that they are extraordinary powers-to suggest that they should be under more or less constant scrutiny. But where the Bill represents a considered response, five years is an appropriate time in which Parliament and the Government can consider this particular take on a particularly difficult situation. At that juncture, the Government and Parliament can think again. For the moment, as the noble and learned Lord, Lord Lloyd suggested, squabbling every year about this would not improve matters, and we should rest with the provisions as they are.

Baroness Hayman: My Lords, I cannot agree with the noble Lord, Lord Faulks, that an annual review would simply be squabbling about the provisions of this Bill. I am tempted to speak, despite my resolution not to speak on controversial issues for several months after leaving the Woolsack, because the issue of a sunset clause was one on which in 2005 I abandoned loyalty to my Government and put forward the amendments to have a sunset clause, which eventually transmuted into the annual review of the Prevention of Terrorism Act.
	I would be saddened if these measures, which, as the noble Lord, Lord Faulks, said, are less draconian in some ways than control orders and represent a considered view, were considered the best that we can do. I am not certain about that, but we will have further debates on Report on some of those issues. I wonder whether that exonerates us from the responsibility of devoting what is not a great deal of time every year to looking at these extraordinary provisions in both Houses of Parliament. It seems to me to be a proper recognition of the retreat from some of the processes that we have held dear for centuries in this country in terms of the administration of the criminal justice system. I do not argue against the premise or fact that there is a need or problem that is not easily solved by the normal criminal justice system; I argue that, because of the extraordinary nature of these measures, it is incumbent on us as parliamentarians to keep them under review. I do not think that that is a dreadful burden.
	However, I am delighted to see the opposition Front Bench such enthusiastic supporters of measures, which I remember they were not quite so enthusiastic about when I proposed them six years ago.

Baroness Butler-Sloss: I strongly support the speech of the noble Baroness, Lady Hayman. It seems to be highly desirable, to put it at its very least, that, as problems change, there should be an annual review of the existing law dealing with terrorism. Like all previous speakers, I, too, support the amendment.

Lord Henley: My Lords, I am grateful to all noble Lords who have spoken in this debate. I have three brief points to make, which will take me a little time, about why we do not accept the amendment moved by the noble Lord, Lord Rosser. First, we believe that renewal every five years strikes the right balance-a word I have used on many occasions; secondly, I believe that annual renewal is unnecessary, and I shall return to that in more detail; and, thirdly, there are other means by which the Bill can be amended or repealed.
	First, I thank my noble friend Lord Faulks for his comments reminding the House that the provisions that face us follow a very lengthy review of all our counterterrorism provisions by the Government, with the announcements earlier in the year and consideration of this Bill, in due course, in both Houses. This is very different from what happened with the 2005 Act. We believe that renewal every five years strikes the right balance and reflects the need to build in effective safeguards to ensure that the powers do not remain in force longer than necessary. It also reflects the competence of Parliament to apply intense scrutiny to legislation and to arrive at a position when it will not need to be reviewed annually. We are moving to a position where we hope that each Parliament will last five years, so each new Parliament will have the opportunity to debate this in the context of the situation at the time and take its own view. That is in line with the length of Parliaments, as I have said, provided by the Fixed-term Parliaments Act.
	Secondly, I believe that annual review is unnecessary. I listened to the noble and learned Lord, Lord Lloyd, say that he was wasting his breath. He never wastes his breath in this House. I have been here for many years and I have listened to him with great devotion on many occasions. I do not always agree with him, but he is not wasting his breath. I appreciate that the noble Lord, Lord Pannick, is more optimistic and feels that an annual debate provides a better opportunity for these things, as do the noble Baroness, Lady Hayman, the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Kennedy, a copy of whose book Just Law-however you pronounce it-sits in my room in the Home Office to this day, and I will always have it there to be reminded about how I should go about my duties. However, I have to say that I do not agree with her, or with others, on this occasion about whether annual renewal is necessary.
	The important thing is to distinguish the process we are going through on this occasion from the process we went through following the 2005 Act. This Bill will be subjected to full parliamentary scrutiny with the usual timetable-we still have not completed it in this House-allowing for a settled position to be reached. In contrast, the 2005 legislation was, as the noble Lord will remember, rushed through with very little opportunity for debate. The noble Baroness, Lady Hayman, reminded the House of her role in that. We believe that that makes annual renewal an appropriate safeguard for the 2005 Act, but one that we do not think is necessary for this Act.
	My third point is that there are also other means by which the Bill can be amended or replaced. The noble Lord, Lord Rosser, stressed that these powers seem to be permanent, but I ask him to look very carefully at Clause 21(2) which states that:
	"The Secretary of State may, by order made by statutory instrument ... repeal the Secretary of State's TPIM powers".
	It is unusual to give the Secretary of State the power to repeal something, but that provision allows her, if she feels they are no longer necessary, at any stage to repeal and take away the powers that she has given herself. Again, I make this point in terms of how, if it becomes clear that the powers should be changed, the legislation can be amended by Parliament at any time in the usual way.
	I appreciate that many noble Lords feel that an annual debate would be preferable to one every five years. It happens on other occasions. I think there is some financial Motion that we debate once a year under EU rules following some vote in this House, and I have noticed, and I think other noble Lords will have noticed, that the number of participants in that debate seems to decline each year as time goes past, so I wonder whether a debate every year is necessary, given the fact that this Bill has been given full coverage in both Houses.
	I appreciate that others may feel differently but, at this stage, I think that what we are offering and have brought forward as a concession in another place-a debate once each Parliament-is appropriate and will be sufficient, given the other safeguards in the Bill. I hope therefore that the noble Lord, Lord Rosser, will feel that on this occasion he can withdraw his amendment.

Lord Rosser: My Lords, I thank the Minister for his response. I also thank all noble Lords who have taken part in this debate for the contributions they have made based, I have to say, on considerably more experience and knowledge of the issues involved than I can claim to possess. Perhaps I should also congratulate the noble Baroness, Lady Hayman, for her determination on this point with the previous Government.
	There is no disagreement that this amendment raises a key issue of real significance. It is about parliamentary oversight of extraordinary and exceptional executive powers which directly affect to a considerable degree the freedom and liberty of a small number of individuals whom the Secretary of State reasonably believes are or have been involved in terrorist activity. That oversight, involving human rights and civil liberties, cannot be properly exercised if done only once every five years. In reality, the Bill would only be amended or dropped in the intervening years if it was the Government, not Parliament, that wanted to change the legislation. That is surely a fact of life.
	I have listened to the Minister's reply. It clearly does not meet the concerns that have been expressed; indeed, I do not think it goes any further than the position he set out at Second Reading. However, I will read Hansard carefully to confirm that my view of the Minister's reply is correct, as I am fairly sure it is, before deciding whether to pursue the matter on Report. In the mean time, I beg leave to withdraw my amendment.
	Amendment 62 withdrawn.
	Amendment 63 not moved.
	Clause 31 agreed.
	House resumed.
	Bill reported without amendment.

Education Bill

Main Bill Page
	Amendments

Report (4th Day)

Clause 41 : Inspection of further education institutions: exempt institutions
	Amendments 81 and 82
	 Moved by Lord Hill of Oareford
	81: Clause 41, page 37, line 13, leave out "follows" and insert "set out in subsections (2) to (10)"
	82: Clause 41, page 38, line 4, at end insert-
	"(11) In section 182 of EIA 2006 (parliamentary control of orders and regulations)-
	(a) in subsection (2), after paragraph (a) insert-
	"(aa) regulations to which subsection (2A) applies,";
	(b) after subsection (2) insert-
	"(2A) This subsection applies to regulations made under section 125(1A) (power to prescribe institutions exempt from inspection), apart from the first regulations to be made under that subsection.";
	(c) in subsection (3), after paragraph (a) insert-
	"(aa) regulations to which subsection (2A) applies,"."
	Amendments 81 and 82 agreed.
	Clause 43 : Schools causing concern: powers of Secretary of State
	Amendment 82A not moved.
	Schedule 12 : Further education institutions: amendments
	Amendment 82B
	 Moved by Lord Hill of Oareford
	82B: Schedule 12, page 90, line 38, at end insert-
	" After section 16 insert-
	"16A Publication of proposals
	(1) The appropriate authority may not make an order under section 16(1) or (3) unless the authority has published a draft of the proposed order, or of an order in substantially the same form, by such time and in such manner as may be prescribed.
	(2) A draft proposal or order in respect of an institution which is maintained by a local authority may not be published without the consent of the governing body and the local authority.
	(3) In this section "the appropriate authority" means-
	(a) in relation to a proposal or order in respect of an institution in England, the Secretary of State;
	(b) in relation to a proposal or order in respect of an institution in Wales, the Welsh Ministers.""

Lord Hill of Oareford: My Lords, I will speak to the government amendments in this group. As noble Lords may be aware, in October 2010 the Office for National Statistics announced its decision to reclassify FE colleges to the public sector for the purposes of the national accounts. This reclassification would impose heavy new administrative burdens on colleges, and could significantly affect their ability to make their own strategic and operational decisions.
	If FE colleges were exposed to the full rigours of the government expenditure regime, they would lose the flexibility they currently have to phase expenditure between different financial years; they would need to work within a financial year that does not line up with their academic year; and it is likely that the very freedoms we are introducing to enable them to borrow without seeking permission would need to be taken away from them, and even tighter constraints introduced. These and other controls would all act as barriers to colleges growing, innovating and developing as we would wish them to do.
	I am very grateful to my noble friend Lady Sharp for raising this important issue in Committee. Recent feedback from the ONS has indicated that the powers held by the Secretary of State in two areas were indicative of public sector control. We have looked again at these areas to see whether changes could be made to secure private sector classification for colleges, something that I know successive Governments have wished to retain.
	The first area is Secretary of State control over the instrument and articles of the governance of colleges. I am sure all noble Lords would agree that every college should have clear, transparent and robust governance arrangements. However, we believe that this can be achieved without Secretary of State control. The government amendments in this group remove the powers of the Secretary of State-or in the case of sixth form colleges, the YPLA-to alter college instrument and articles and place these powers with the college itself. For most colleges this change will make no difference, but it will enable colleges that want to develop and improve their governance in response to the needs of their students, employers and local community to do so. We have retained the essential elements that all instruments and articles must contain in new Schedule 4, which is set out in Amendment 84ZL.
	The second area is the Secretary of State's control over the closure of colleges, known as dissolution. Presently, only the Secretary of State can dissolve a college. The government amendments remove this power from the Secretary of State and give colleges control over their own dissolution. These amendments, and the regulations that will be laid in support of them, include a number of safeguards to ensure that any dissolution decision is taken only once all those affected-staff, students and the local community-have been consulted, and that the process is undertaken in a clear and transparent way, recognising that colleges are providers of an important public service.
	Existing legislation provides the state with a legal mechanism to tackle, in extremis, failure in colleges, and this will be retained. In cases where there is evidence of significant mismanagement in colleges, the Secretary of State will be able to exercise his powers of intervention to direct the college to dissolve itself and transfer its property, rights and liabilities to another provider. This action will be taken only once all other steps have been taken to secure improvements, where it is necessary for the Government to intervene as a matter of last resort, to protect students.
	I wrote today about government "correcting" Amendments 84ZBA and 84ZN, which correct the provision in Schedule 12 that repeals the duty on colleges to have regard to guidance on consultation with students and employers in England, while retaining this in Wales.
	It may help if I inform noble Lords of discussions between the noble Baroness, Lady Jones of Whitchurch, and my honourable friend, the Minister for Further Education, Skills and Lifelong Learning, John Hayes MP, on her Amendment 84ZLA, which would retain requirements for staff and student governors. On behalf of my honourable friend, I thank the noble Baroness and the noble Lord, Lord Young of Norwood Green, for taking the time to meet us. I apologise to them for bringing these amendments forward at a later stage than we would have liked.
	The Government have brought forward these changes to support our case for the private sector classification for colleges, in accordance with the policy of successive Governments. It was not our intention to encourage colleges to remove staff or student governors from college governance arrangements. I know that colleges greatly value the contribution that those governors make.
	Having listened to the arguments that were put to him by the noble Baroness, Lady Jones of Whitchurch, my honourable friend Mr Hayes and I have spoken further. We have decided that the Government will return at Third Reading with their own amendment, which will give effect to what the noble Baroness's amendment seeks to achieve. With that assurance, I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness Jones of Whitchurch: My Lords, as the Minister has indicated, we have tabled Amendment 84ZLA in this group. Its aim was to reinstate the rights of students and staff to be represented on FE college governing bodies. As the Minister has described, last night we had a useful meeting on this issue with John Hayes. I think it was acknowledged at that meeting that the proposals had arrived rather late and that there had not been time to consult the stakeholders effectively on the implications of these changes.
	I am therefore grateful that the Minister has agreed to reconsider this issue and to come back with a form of words that will reinstate the right to student and staff representation at Third Reading. On this basis, we are prepared to withdraw Amendment 84ZLA. We of course reserve the right to return to this issue at Third Reading should we feel that the new proposals are lacking in any way, but I am sure that that will not be the case. For the moment, I thank the Minister for the progress made on this issue.
	In the mean time, we are still absorbing the wider implications of these governance changes. I should be grateful if the Minister could clarify whether one consequence, intended or otherwise, is that governors of FE colleges will be able to be paid in the future. If he does not have that information to hand, perhaps he could write to me.
	Moving briefly to the issues covered by the noble Baroness, Lady Brinton, in Amendment 83, this issue was well aired in Grand Committee and very much supported by us at that time. As the noble Baroness, Lady Sharp, said during the earlier debate, colleges should be,
	"a dynamic nucleus within their communities".-[Official Report, 12/9/11: col. GC 141].
	FE colleges have worked hard in the last decade to advance strong partnerships with local businesses, and have the inside track on local employment markets. Their links with local youth services are now more important than ever, as resources shrink.
	The Association of Colleges has argued that while it highly prizes the work that local colleges achieve in their communities, this work will carry on whether or not there is a duty to do it. The Minister said something similar in Grand Committee. I would turn this argument on its head; if the work is so prized and so effective, should we not take the precaution of leaving it in the original legislation to ensure that it continues, rather than sending a signal that it is no longer a requirement on colleges, which might otherwise develop different priorities?
	With these comments, I look forward to the Minister's response to the debate.

Baroness Sharp of Guildford: My Lords, I have two amendments in this grouping, Amendments 83 and 84. They do indeed pick up the issue that we spoke about in Committee, which is the duty on the part of colleges to promote the well-being of the local area.
	I thank the Minister for bringing forward this raft of amendments. As he knows, I am chairing a commission on behalf of NIACE, the AoC and the 157 Group, which is looking into the role of colleges in their communities. The issue of the reclassification by ONS cropped up in our deliberations on this commission. Our intention is to promote the role of colleges. As the noble Baroness says, we have used the term "dynamic nucleus within their communities"-they should be proactive in developing partnerships and in promoting well-being and community cohesion within their communities. Since that is the case, we are very anxious that they should not be inhibited from this by a statistical classification, and therefore we have been backing the moves made by the department here. I put down some rather naive amendments in Committee in order to pave the way for this, and I am delighted that we have-I hope-managed to come forward with a way that prevents this reclassification.
	In relation to my own amendments, I have spoken at some length both with the AoC and with the department about this issue. As I have suggested, the report, which is going to be presented at the AoC conference later this month, will in fact suggest a wider role for colleges within the community, and I think there is a fair amount of good will towards the promotion of this role. In the light of that, I have decided that it would not be appropriate at this time to press my amendments. There is good will on all parts, and the assumption is that colleges will be promoting the well-being of their local area as part of what they will be doing. There is no question of that, but it does not necessarily need to be in the Bill, so, as I say, I shall not press my amendments today.

Lord Hill of Oareford: My Lords, I thank my noble friend Lady Sharp for raising the issue of promoting well-being, and take the opportunity to thank her formally for the work she is doing at the helm of the Government's commission on the role of colleges in their communities. As she has just said, colleges contribute significantly to the social and economic well-being of their local areas, not only through the education, skills and employment that they provide but through their partnerships and relationships with other bodies in their local areas. I am grateful to her, and look forward to the report that she was talking about, which she is launching at the Association of Colleges conference later in the month.
	I am grateful to the noble Baroness, Lady Jones of Whitchurch, for her remarks. On her specific question about remuneration, I understand that colleges need to apply, as now, for exceptional approval for the remuneration of governors for their services as members of the governing body. The change is that they would be treated in line with other charities, and would have to apply to the Charity Commission rather than to the Secretary of State. There is no general power in charity law for trustee boards to make remuneration payments, so permission would be granted only in exceptional circumstances, as the commission has a general expectation that charity assets should be used directly for the purposes of the charity.
	The amendments that the Government have tabled, as I think has been recognised, have been made within the context of a changed landscape, in which government and the sector are working together. It has been the policy of successive Governments since the inception of FE corporations in 1992 that colleges should not have the financial and control requirements associated with public sector classification. Our amendments seek to strike the right balance between securing that classification while safeguarding students and public investment in the sector. With the assurance that I have given the noble Baroness, Lady Jones of Whitchurch, I hope noble Lords generally will feel that we have struck such a sensible balance.
	Amendment 82B agreed.
	Amendment 82C
	 Moved by Lord Hill of Oareford
	82C: Schedule 12, page 90, line 40, at end insert-
	"( ) In subsection (4)(c), for "27" substitute "27C or 33P"."
	Amendment 82C agreed.
	Amendment 83 not moved.
	Amendments 83A to 83E
	 Moved by Lord Hill of Oareford
	83A: Schedule 12, page 91, line 18, at end insert-
	" In section 20 (constitution of further education corporation and conduct of further education institution), for subsection (2) substitute-
	"(2) Instruments of government and articles of government of further education corporations in England-
	(a) must comply with the requirements of Part 2 of Schedule 4, and
	(b) subject to that, may make such other provision as may be necessary or desirable.
	(2A) Instruments of government and articles of government of further education corporations in Wales-
	(a) must comply with the requirements of Part 3 of Schedule 4, and
	(b) subject to that, may make any provision authorised to be made by that Part of that Schedule and such other provision as may be necessary or desirable."
	For section 22 substitute-
	"22 Subsequent instruments and articles: England
	A further education corporation in England may modify or replace their instrument of government or articles of government.
	22ZA Subsequent instruments and articles: Wales
	(1) Subject to subsections (2) and (3), the Welsh Ministers may-
	(a) if a further education corporation in Wales submits a draft of an instrument of government to have effect in place of their existing instrument, by order make a new instrument of government in the terms of the draft or in such terms as they think fit, and
	(b) if such a corporation submits draft modifications of an instrument made under paragraph (a), by order modify the instrument in the terms of the draft or in such terms as they think fit.
	(2) The Welsh Ministers must not make a new instrument otherwise than in the terms of the draft, or modify the instrument otherwise than in the terms of the draft, unless they have consulted the corporation.
	(3) If the institution conducted by a further education corporation mainly serves the population of England, or receives financial support from the Chief Executive of Skills Funding, the Welsh Ministers must consult the Chief Executive of Skills Funding before making an order under subsection (1).
	(4) The Welsh Ministers may by order modify, replace or revoke any instrument of government or articles of government of any further education corporation in Wales.
	(5) An order under subsection (4) may relate to all further education corporations in Wales, to any category of such corporations specified in the order or to any such corporation so specified.
	(6) Before making an order under subsection (4), the Welsh Ministers must consult-
	(a) the further education corporation or (as the case may be) each further education corporation to which the order relates, and
	(b) the Chief Executive of Skills Funding, if the institution conducted by the corporation or (as the case may be) any corporation to which the order relates mainly serves the population of England, or receives financial support from the Chief Executive of Skills Funding.
	(7) A further education corporation in Wales may, with the consent of the Welsh Ministers-
	(a) make new articles of government in place of their existing articles, or
	(b) modify their existing articles.
	(8) The Welsh Ministers may by a direction under this section require further education corporations in Wales, any class of such corporations specified in the direction or any particular further education corporation so specified-
	(a) to modify, replace or revoke their articles of government, or
	(b) to secure that any rules or bye-laws made in pursuance of their articles of government are modified, replaced or revoked,
	in any manner so specified.
	(9) Before giving a direction under this section, the Welsh Ministers must consult the further education corporation or (as the case may be) each further education corporation to which the direction applies."
	83B: Schedule 12, page 91, line 19, leave out paragraph 4 and insert-
	" For section 27 substitute-
	"27 Proposals for dissolution of further education corporations: England
	(1) This section applies if a further education corporation in England propose that the corporation should be dissolved.
	(2) The corporation must publish details of the proposal, and such other information as may be prescribed, in accordance with regulations.
	(3) The corporation must consult on the proposal, and take account of the views of those consulted, in accordance with regulations.
	27A Dissolution of further education corporations: England
	(1) This section and section 27B apply if, after complying with section 27, a further education corporation in England resolve that the corporation should be dissolved on a specified date.
	(2) "The dissolution date" means the date specified in a resolution under subsection (1).
	(3) The corporation must notify the Secretary of State of the resolution and the dissolution date as soon as reasonably practicable.
	(4) The corporation are dissolved on the dissolution date.
	27B Dissolution of further education corporations: England: transfer of property, rights and liabilities
	(1) At any time before the dissolution date, the corporation may transfer any of their property, rights or liabilities to such person or body, or a person or body of such description, as may be prescribed.
	(2) The corporation may do so only with the consent of the person or body concerned.
	(3) A transfer under subsection (1) has effect on the dissolution date.
	(4) Subsection (5) applies if a person or body prescribed, or of a description prescribed, under subsection (1) is not a charity established for charitable purposes which are exclusively educational purposes.
	(5) Any property transferred to the person or body must be transferred on trust to be used for charitable purposes which are exclusively educational purposes.
	27C Dissolution of further education corporations: Wales
	(1) Subject to the following provisions of this section, the Welsh Ministers may by order provide for-
	(a) the dissolution of a further education corporation in Wales, and
	(b) the transfer to any person mentioned in subsection (2) or (3) of property, rights and liabilities of the corporation.
	(2) Such property, rights and liabilities may, with the consent of the person or body concerned, be transferred to-
	(a) any person appearing to the Welsh Ministers to be wholly or mainly engaged in the provision of educational facilities or services of any description, or
	(b) any body corporate established for purposes which include the provision of such facilities or services.
	(3) Such property, rights and liabilities may be transferred to a higher education funding council.
	(4) Where the recipient of a transfer under an order under this section is not a charity established for charitable purposes which are exclusively educational purposes, any property transferred must be transferred on trust to be used for charitable purposes which are exclusively charitable purposes.
	(5) An order under this section may apply section 26 with such modifications as the Welsh Ministers consider necessary or desirable.
	(6) Before making an order under this section in respect of a further education corporation, the Welsh Ministers must consult-
	(a) the corporation, and
	(b) the Chief Executive of Skills Funding, if the institution conducted by the corporation mainly serves the population of England, or receives financial support from the Chief Executive of Skills Funding.""
	83C: Schedule 12, page 91, line 21, leave out paragraph 5 and insert-
	" For section 29 substitute-
	"29 Government and conduct of designated institutions
	(1) This section applies to a designated institution, other than-
	(a) an institution conducted by a company, or
	(b) an institution conducted by an unincorporated association, if the order designating the institution provides for its exemption.
	(2) For each designated institution to which this section applies, there is to be-
	(a) an instrument providing for the constitution of a governing body of the institution (to be known as the instrument of government), and
	(b) an instrument in accordance with which the institution is to be conducted (to be known as the articles of government).
	(3) In sections 29A to 29C-
	"instrument" means an instrument of government or articles of government;
	"regulatory instrument", in relation to an institution, means-
	(a) an instrument of government or articles of government, or
	(b) any other instrument relating to or regulating the institution.
	29A First post-designation instruments and articles of designated institutions: England and Wales
	(1) The first post-designation instrument and articles of government of a designated institution to which section 29 applies must each comply with subsection (3) and (if the institution is in Wales) subsection (6).
	(2) The "first post-designation instrument and articles of government" of a designated institution are the first instrument of government and articles of government that the institution has after the designation takes effect.
	(3) The instrument must meet one of the following requirements-
	(a) the instrument was in force when the designation took effect and is approved for the purposes of this section by the appropriate authority;
	(b) the instrument-
	(i) is made in pursuance of a power under a regulatory instrument or (where there is no such power) by the governing body of the institution, and
	(ii) (in either case) is approved for the purposes of this section by the appropriate authority;
	(c) the instrument is made by the appropriate authority by order.
	(4) An instrument made by the governing body under subsection (3)(b) or the appropriate authority under subsection (3)(c) may replace wholly or in part an existing regulatory instrument.
	(5) Before making an instrument under subsection (3)(c), the appropriate authority must, so far as it appears practicable to do so, consult-
	(a) the governing body of the institution, and
	(b) where there is power under a regulatory instrument to make the instrument, and that power is exercisable by persons other than the governing body of the institution, the persons by whom the power is exercisable.
	(6) If the institution is in Wales, provision made by the instrument in relation to the appointment of members of the governing body must take into account the members who may be appointed by the Welsh Ministers under section 39 of the Learning and Skills Act 2000.
	(7) In this section "the appropriate authority"-
	(a) in relation to an institution in England, means the Secretary of State;
	(b) in relation to an institution in Wales, means the Welsh Ministers.
	29B Changes to instruments and articles: England
	(1) This section applies to a designated institution in England which is an institution to which section 29 applies.
	(2) The governing body of the institution may modify or replace its instrument of government and articles of government.
	(3) The instrument of government and articles of government (as modified or replaced)-
	(a) must comply with the requirements of Part 2 of Schedule 4, and
	(b) subject to that, may make such other provision as may be necessary or desirable.
	29C Changes to instruments and articles: Wales
	(1) This section applies to a designated institution in Wales which is an institution to which section 29 applies.
	(2) Subject to subsection (3), the governing body of the institution may modify, replace or revoke its instrument of government and articles of government if -
	(a) the instrument falls within section 29A(3)(a),
	(b) the instrument was made by the governing body, or
	(c) the instrument was made in pursuance of a power under a regulatory instrument, where there is no other power to modify it.
	(3) An instrument approved under section 29A(3)(a) or (b) by the Welsh Ministers may not be modified, replaced or revoked without the consent of the Welsh Ministers.
	(4) The Welsh Ministers may by order modify, replace or revoke the instrument of government or articles of government of the institution.
	(5) Before making an order under subsection (4), the Welsh Ministers must, so far as it appears practicable to do so, consult-
	(a) the governing body of the institution, and
	(b) where there is power under a regulatory instrument to make the instrument, and that power is exercisable by persons other than the governing body of the institution, the persons by whom the power is exercisable.""
	83D: Schedule 12, page 91, line 22, at end insert-
	" In section 30 (special provision for certain institutions), in subsection (1) for "section 29" substitute "sections 29 to 29C"."
	83E: Schedule 12, page 91, line 36, at end insert-
	"( ) in subsection (6)(e)(ii), for "27" substitute "27C or 33P";"
	Amendments 83A to 83E agreed.
	Amendment 84 not moved.
	Amendments 84ZA to 84ZG
	 Moved by Lord Hill of Oareford
	84ZA: Schedule 12, page 91, line 42, at end insert-
	" In section 33I(2) (instrument and articles of government of sixth form college corporations)-
	(a) in paragraph (a), after "requirements of" insert "Part 2 of";
	(b) for paragraph (b) substitute-
	"(b) subject to that, may make such other provision as may be necessary or desirable."
	84ZB: Schedule 12, page 92, line 23, leave out paragraphs 14 and 15 and insert-
	" For section 33L substitute-
	"33L Changes to instruments and articles
	(1) A sixth form college corporation may modify or replace their instrument of government or articles of government.
	(2) A sixth form college corporation to which section 33J applies may do the things mentioned in subsection (1) only with the consent of the trustees of the relevant sixth form college."
	For section 33N substitute-
	"33N Proposals for dissolution of sixth form college corporations
	(1) This section applies if a sixth form college corporation propose that the corporation should be dissolved.
	(2) The corporation must publish details of the proposal, and such other information as may be prescribed, in accordance with regulations.
	(3) The corporation must consult on the proposal, and take account of the views of those consulted, in accordance with regulations.
	33O Dissolution of sixth form college corporations
	(1) This section and section 33P apply if, after complying with section 33N, a sixth form college corporation resolve that the corporation should be dissolved on a specified date.
	(2) "The dissolution date" means the date specified in a resolution under subsection (1).
	(3) The corporation must notify the Secretary of State of the resolution and the dissolution date as soon as reasonably practicable.
	(4) The corporation are dissolved on the dissolution date.
	33P Dissolution of sixth form college corporations: transfer of property, rights and liabilities
	(1) At any time before the dissolution date, the corporation may transfer any of their property, rights or liabilities to such person or body, or a person or body of such description, as may be prescribed, subject to subsection (4).
	(2) The corporation may do so only with the consent of the person or body concerned.
	(3) A transfer under subsection (1) has effect on the dissolution date.
	(4) In the case of a sixth form college corporation to which section 33J applies, any property held by the corporation on trust for the purposes of the relevant sixth form college must be transferred to the trustees of the relevant sixth form college.
	(5) Subsection (6) applies if a person or body prescribed, or of a description prescribed, under subsection (1) is not a charity established for charitable purposes which are exclusively educational purposes.
	(6) Any property transferred to the person or body must be transferred on trust to be used for charitable purposes which are exclusively educational purposes.
	(7) Subsection (6) does not apply to property transferred to the person or body by virtue of subsection (4).""
	84ZBA: Schedule 12, page 94, line 8, leave out paragraph 17 and insert-
	"17 Section 49A (guidance about consultation with students and employees), as it has effect in relation to England, is repealed."
	84ZC: Schedule 12, page 94, line 13, at end insert-
	" Section 51 (publication of proposals) is repealed."
	84ZD: Schedule 12, page 94, line 24, at end insert-
	"( ) In subsection (7), after "include" insert "- (a)" and at the end insert-
	"(b) a direction requiring a governing body to make a resolution under section 27A(1) for the body to be dissolved on a date specified in the direction.
	(7A) A governing body to which a direction such as is mentioned in subsection (7)(b) is given is to be taken for the purposes of section 27A(1) to have complied with section 27 before making the resolution required by the direction.""
	84ZE: Schedule 12, page 95, line 26, at end insert-
	"( ) In subsection (7), after "include" insert "- (a)" and at the end insert-
	"(b) a direction requiring a governing body to make a resolution under section 33O(1) for the body to be dissolved on a date specified in the direction.
	(7A) A governing body to which a direction such as is mentioned in subsection (7)(b) is given is to be taken for the purposes of section 33O(1) to have complied with section 33N before making the resolution required by the direction.""
	84ZF: Schedule 12, page 96, line 22, at end insert-
	" In section 88 (stamp duty)-
	(a) for "27" substitute "27B, 27C";
	(b) for "33N" substitute "33P".
	In section 88A (stamp duty land tax)-
	(a) for "27" substitute "27B, 27C";
	(b) for "33N" substitute "33P"."
	84ZG: Schedule 12, page 96, line 23, leave out paragraph 32 and insert-
	" (1) Section 89 (orders, regulations and directions) is amended as follows.
	(2) In subsection (2)-
	(a) for "22, 29(6) and (8)" substitute "22ZA(1) and (4), 29A(3)(c), 29C(4)";
	(b) after "33A(5)(b)" insert "33J(2), 33K(1),";
	(c) omit "or section 33L".
	(3) In subsection (3), after "subsection (3A)" insert "or (3B)".
	(4) After subsection (3A) insert-
	"(3B) An order falls within this subsection if-
	(a) it is an order revoking (wholly or in part) an order under section 15 or 16 and is made by virtue of section 27A(4), or
	(b) it is an order revoking (wholly or in part) an order under section 33A, 33B or 33C and is made by virtue of section 33O(4).""
	Amendments 84ZA to 84ZG agreed.
	Amendment 84ZH had been withdrawn from the Marshalled List.
	Amendments 84ZJ and 84ZK
	 Moved by Lord Hill of Oareford
	84ZJ: Schedule 12, page 96, line 26, after "(1)" insert "-
	(a) after the definition of "further education" insert-
	""further education corporation in England" means a further education corporation established to conduct an institution in England;
	"further education corporation in Wales" means a further education corporation established to conduct an institution in Wales;";
	(b) "
	84ZK: Schedule 12, page 96, line 29, after "(index)" insert "-
	(a) after the entry for "further education corporation" insert-
	
		
			 "further education corporation in England section 90(1) 
			 further education corporation in Wales section 90(1)" 
		
	
	(b) "
	Amendments 84ZJ and 84ZK agreed.
	Amendment 84ZL
	 Moved by Lord Hill of Oareford
	84ZL: Schedule 12, page 96, line 31, leave out paragraph 35 and insert-
	" For Schedule 4 substitute-
	"SCHEDULE 4Instruments and articles of governmentPart 1General
	1 In this Schedule-
	"instrument" means an instrument of government or articles of government;
	"the institution" means-
	(a) in the case of a further education corporation, the institution which the corporation are established to conduct;
	(b) in the case of the governing body of a designated institution, the institution;
	(c) in the case of a sixth form college corporation, the relevant sixth form college.
	Part 2England
	2 This Part applies in relation to-
	(a) a further education corporation in England;
	(b) the governing body of a designated institution in England;
	(c) a sixth form college corporation.
	3 In this Part "the body" means-
	(a) in the case of a further education corporation or a sixth form college corporation, the corporation;
	(b) in the case of a governing body, the governing body.
	4 An instrument must provide for-
	(a) the number of members of the body,
	(b) the eligibility of persons for membership, and
	(c) the appointment of members.
	5 (1) An instrument must make provision about the procedures of the body and the institution.
	(2) In particular, an instrument must specify how the body may resolve for its dissolution and the transfer of its property, rights and liabilities.
	6 (1) An instrument must make provision for there to be-
	(a) a chief executive of the institution, and
	(b) a clerk to the body.
	(2) An instrument must make provision about the respective responsibilities of the body, the chief executive and the clerk.
	(3) The responsibilities of the body must include-
	(a) in the case of a sixth form college corporation to which section 33J applies, the preservation and development of the educational character and mission of the institution and the oversight of its activities;
	(b) in the case of any other sixth form college corporation, a further education corporation or a governing body, the determination and periodic review of the educational character and mission of the institution and the oversight of its activities;
	(c) in any case, the effective and efficient use of resources, the solvency of the institution and the body and the safeguarding of their assets.
	7 An instrument must require the body to publish arrangements for obtaining the views of staff and students on the matters for which the body are responsible under paragraph 6(3)(a) or (b).
	8 An instrument must permit the body to change their name with the approval of the Secretary of State.
	9 An instrument must specify how the body may modify or replace the instrument of government and articles of government.
	10 An instrument must prohibit the body from making changes to the instrument of government or articles of government that would result in the body ceasing to be a charity.
	11 An instrument must provide for-
	(a) a copy of the instrument to be given free of charge to every member of the body,
	(b) a copy of the instrument to be given free of charge, or at a charge not exceeding the cost of copying, to anyone else who requests it, and
	(c) a copy of it to be available for inspection at the institution on request, during normal office hours, to every member of staff of, and student at, the institution.
	12 An instrument must provide for the authentication of the application of the seal of the body.
	Part 3Wales
	13 This Part applies in relation to further education corporations in Wales.
	14 Provision made by an instrument in relation to the appointment of members of the corporation must take into account the members who may be appointed by the Welsh Ministers under section 39 of the Learning and Skills Act 2000.
	15 (1) An instrument must provide for-
	(a) the number of members of the corporation,
	(b) the eligibility of persons for membership, and
	(c) the appointment of members.
	(2) An instrument may provide for the nomination of any person for membership by another, including by a body nominated by the Welsh Ministers.
	16 An instrument must provide for one or more officers to be chosen from among the members.
	17 An instrument may-
	(a) provide for the corporation to establish committees, and
	(b) permit such committees to include persons who are not members of the corporation.
	18 An instrument may provide for the delegation of functions of the corporation to-
	(a) officers or committees, or
	(b) the principal of the institution.
	19 An instrument may provide for the corporation to pay allowances to its members.
	20 An instrument must provide for the authentication of the seal of the corporation.
	21 An instrument must require the corporation to-
	(a) keep proper accounts and proper records in relation to the accounts, and
	(b) prepare in respect of each financial year of the corporation a statement of accounts.
	22 An instrument must-
	(a) provide for the appointment of a principal of the institution, and
	(b) determine which functions exercisable in relation to the institution are to be exercised by the corporation, its officers or committees and which by the principal of the institution.
	23 An instrument must make provision about the procedures of the corporation and the institution.
	24 An instrument must provide-
	(a) for the appointment, promotion, suspension and dismissal of staff, and
	(b) for the admission, suspension and expulsion of students.
	25 An instrument may make provision authorising the corporation to make rules or bye-laws for the government and conduct of the institution, including in particular rules or bye-laws about the conduct of students, staff or both.""
	Amendment 84ZLA (to Amendment 84ZL) not moved.
	Amendment 84ZL agreed
	Amendments 84ZM and 84ZN
	 Moved by Lord Hill of Oareford
	84ZM: Schedule 12, page 96, line 33, at end insert-
	" (1) LSA 2000 is amended as follows.
	(2) In section 110 (secondary education), in subsection (5), for "51(3A)" substitute "16A(2)".
	(3) In section 143 (further education sector: designated institutions), in subsection (6)(b), for "section 29" substitute "any of sections 29 to 29C"."
	84ZN: Schedule 12, page 96, line 33, at end insert-
	" In section 22 of the Further Education and Training Act 2007 (consultation of further education institutions), in the new section 49A to be inserted into FHEA 1992 in relation to Wales-
	(a) in subsection (1)-
	(i) after "further education sector" insert "in Wales";
	(ii) for "appropriate authority" substitute "Welsh Ministers";
	(b) omit subsection (3)."
	Amendments 84ZM and 84ZN agreed.
	Amendment 84A
	 Moved by Baroness Jones of Whitchurch
	84A: After Clause 52, insert the following new Clause-
	"Academies: school teachers' qualifications
	(1) EA 2002 is amended as follows.
	(2) In section 133 (requirement to be qualified), in subsection (6) (schools to which this section applies), after paragraph (b) insert-
	"(c) an Academy, including a free school,
	(d) a city technology college, or
	(e) a city college for the technology of the arts."
	(3) At the end of subsection (6) of that Act insert-
	"(7) Nothing in subsection (6) should prohibit a school's ability to employ non-qualified individuals to provide educational support in relation to non-'specified work' in so far as it would positively contribute to pupils' educational development".
	(4) Any individual employed under the terms of subparagraph (3) above shall be supervised in their work by a qualified teacher."

Baroness Jones of Whitchurch: My Lords, Amendment 84A has a simple but fundamental aim-that is, to ensure that all teachers practising in the classroom have qualified teacher status. Until recently this was the case in all state schools but the Government have decided that this will not be a requirement for teachers in free schools. This was debated at length in Grand Committee and the need for teachers to be qualified, as I recall, had virtually unanimous support. For many noble Lords it was what I would colloquially describe as a no-brainer. During the debate the Minister said that the Government's reasoning for this was,
	"simply intended to allow the possibility of greater innovation at the edges of the maintained sector".-[Official Report, 14/9/11; col. GC 227.]
	He repeated this argument in a letter to me of 25 October. I do not think that many of us were convinced by this argument at the time. It was, with respect, completely lacking in evidence or justification.
	The Minister then went on to argue in his letter that a skill in measuring the progress of each pupil and the delivery of good-quality subject materials were important elements of teacher training but that he,
	"believes it is possible for a teacher to be proficient in them without having attained Qualified teacher Status".
	My simple challenge back to him is: how would he know? How would parents or even head teachers know if these people were truly up to scratch?
	This issue goes to the heart of the professional standing of the teaching profession. Whereas most sensible participants in this debate-including the teachers-would argue that the challenge is to drive up standards in the classroom and increase professionalism, the Government seem to be pulling in the opposite direction.
	In our earlier debate, a number of noble Lords contrasted the status of teachers with other professions. For example, we wondered whether allowing doctors in certain hospitals not to be qualified would enable "greater innovation". We wondered what concerns colleagues would have about the standard of patient care in those circumstances and what would be the impact on successful treatment rates. Of course, you can make a similar analogy with other professions.
	It is difficult to see why positive innovation is more likely to come about where people are not trained to the required standards in their profession. It is all too easy to see, in the case of unqualified teachers at free schools, how cohorts of children could be failed by teaching quality below the expected level of a qualified teacher.
	Our amendment in part is about the Government showing to the teaching profession that they value and want to build on the professionalism in the sector. More than that, it is about ensuring standards in what we believe is one of the most important jobs that it is possible to have. It is in the interests of us all that the next generation is taught to a high standard by trained professionals, and it will do us all a disservice if it is not.
	As I mentioned in Grand Committee, the reasoning for the Government's position is unclear. I noted that the Secretary of State had said of free schools:
	"We want the dynamism that characterises the best independent schools to help drive up standards in the state sector ... In that spirit, we will not be setting requirements in relation to qualifications".-[Official Report, Commons, 15/11/10; col. 623.]
	I question the presumption that a highly performing independent school is the result of the fact that its teachers do not need to be qualified, although of course many already are. Surely the more significant factors are those such as selection processes and smaller class sizes.
	If the Government are serious about building on the successes of the previous Government in raising standards of teaching; if the Prime Minister and the Deputy Prime Minister are serious when they say in the White Paper that is indeed called The Importance of Teaching,
	"no education system can be better than the quality of its teachers";
	and if the Government seriously want to learn from international best practice, about which the OECD says:
	"many of the high performing countries share a commitment to professionalised teaching",
	how can the Government at the same time say that in some of our schools teachers do not need to be qualified to teach? As the noble Lord, Lord Storey, argued in Grand Committee, it is almost Dickensian.
	As colleagues rightly said in Committee, we are not saying that everyone who stands in front of a class should be qualified. I recognise that, for example, trainee teachers are and should be permitted to teach as part of their training. I accept the points made that people without teaching qualifications, such as teaching assistants, add real value to the classroom and make a difference to children's lives. What is important and what our amendment aims to achieve is that the progression of each pupil should be overseen by someone with a teaching qualification.
	It is a basic right of pupils to be taught by a qualified teacher. Parents expect it and the teaching profession seeks it. There is no research or evidence to show that pupils will benefit from this change. I hope noble Lords will feel able to support our amendment. I beg to move.

Baroness Massey of Darwen: My Lords, I am seriously concerned about the issue of having non-qualified teachers in a classroom. Qualifications for teaching are not just about being qualified to teach maths, science or languages; they are about having some knowledge of child development. It is crucial for teachers to learn about how children grow, how they learn to think and how they learn at different ages. It is different if a parent or grandparent goes into a classroom to hear children read or other such activities. Those people are under supervision and fit in with what the class is doing anyway. I would not like someone who was not qualified to be teaching chemistry or physics. It seems quite a dangerous thing to happen. I certainly would not allow into my house an electrician or a plumber who was not qualified. Why would we allow people who are not qualified to teach children? My young nephew recently trained to be a soccer coach for young people. He had to learn not only the skills of teaching soccer but various techniques of teaching as well as first aid. Having non-qualified people in classrooms could miss out all those extra things that teachers learn.
	I have some questions for the Minister. How will these non-qualified teachers be recruited? Who will they be? Supposing that they were predominant in a school, what kind of education would those children receive? This is a very serious issue. I look forward to the Minister's response.

Baroness Walmsley: My Lords, the noble Baroness, Lady Jones, used the analogy of unqualified doctors in a hospital. While we are not talking about life and death here, we are talking about life chances. I know that the Government have an enormous respect for teachers and a genuine intention to improve the professionalism of teachers right across the board, but I have some questions about how this particular freedom would work. For example, would there be a maximum percentage of people teaching children in a free school who did not have a teaching qualification? How would the number of people teaching in a free school without a qualification be monitored? Would there be continuous professional development to make up the gap identified by the noble Baroness, Lady Massey, when someone might be particularly good at IT or a particular modern language, which have been used as examples by the Government, but had not had that training in child development and classroom management-another very important thing taught in teacher training? How will the Government monitor this and make sure that the standard of what the children in schools receive is of the highest? That is what matters in the end. It does not matter so much what is written on a piece of paper as long as those children who walk through that school door get a good offer from the school.
	I hope that my noble friend the Minister will answer all those questions. It has been said that this is envisaged to operate in the margins of maintained schools. That may be all very well, because plenty of different people who come in to contribute to children's experience in schools do not have qualified teacher status. We all understand the importance of the direction of teachers and their overall experience in the school. I would not want them to be operating any more than in the margins of the teaching workforce in any particular school. I hope that my noble friend the Minister can answer those questions.

Baroness Perry of Southwark: I yield to no one in recognising the importance of the right kind of training for teachers and I have spent a great deal of my life in working on trying to get the training right. It is extremely important for the vast majority of teachers that they have been trained and that they understand the things that the noble Baroness mentioned, such as child development, and have an understanding of how children learn, and so on. But I also think it extremely important that we have some flexibility for the outstanding person who brings a particular gift, talent and knowledge. I remember a case some years ago, I think in the 1990s, of a professor of mathematics, an outstanding mathematician, who had taken fairly early retirement and decided that he would like to teach younger children, in a secondary school, to pass on his passion for mathematics to young people. He discovered that because the regulations said that he had not been trained as a teacher he could not do that. It is a mistake-a mistaken idea of what is needed in a school.
	As my noble friend Lady Walmsley has said, I would want the overwhelming majority of teachers to have been trained, but it is important to have flexibility to bring in the right kind of person to fill a niche in a school, someone who can bring perhaps a very special talent and range of experience, which would be exactly what the school needed and would hugely contribute to children as they go through their schooling.

Lord Knight of Weymouth: My Lords, this is an important amendment and it is important for the Minister to respond to the questions that have been raised. When the Government were first formed, they made great store of talking up the importance of teaching. Indeed, the title of the first White Paper that the new department published was The Importance of Teaching. Just now, I looked up the discussion document on teacher training published in June this year, where the Secretary of State, Michael Gove, begins his foreword:
	"If we want to have an education system that ranks with the best in the world, then we need to attract the best people and we need to give them outstanding training".
	Clearly, if we believe what the Secretary of State is saying on that aspect of the Government's policy, the Secretary of State understands the importance of trained, qualified teachers.
	I listened carefully to what the noble Baroness, Lady Perry, said in preceding me and it is important to offer people the opportunity to come in with other expertise and knowledge. However, there are ways of doing that while still preserving the importance of qualified teachers. For example, it should be easier for people to become qualified and to train on the job in terms of pedagogy. What I would not want to see is this opening the door to a sort-of "Jamie's Dream School" approach. Just because you are brilliant in your field-you might even be a brilliant noble Lord-it does not mean that you are necessarily going to be a brilliant teacher. I think that those of us who watched any of the episodes of "Jamie's Dream School" will have been appalled at times by the inability of some of those people, brilliant in their subject, to relate to children and to teach them. It needs some training so, yes, we should allow some of those brilliant people to enter the teaching profession but we should also allow them an opportunity to train and gain pedagogical understanding as they do so, under the supervision of a qualified teacher. That is what this amendment offers.
	I am concerned that as the free school policy develops, it is being informed by a belief on the part of some in the department that if it works in independent schools, it must work in free schools and in the maintained sector-because independent schools can have non-qualified teachers, it must be fine. We have heard the parallels with health, for example, and about whether it is fair to presume that if I bowl up to a hospital and it has let somebody practise, it will be all right and it does not really matter whether they are qualified. I do not like that idea. I would not trust someone to treat me as a medical practitioner unless they were qualified and I would not want to trust my children to a teacher unless that practitioner was qualified.
	Many or most independent schools do a great job but they do that with a very narrow set of pupils. I know that if my friends in the Headmasters' and Headmistresses' Conference were listening, they would be shouting at me but it is fair to say that it is often the case that those pupils are from fairly narrow backgrounds and do not, by and large, have quite the same behavioural challenges or some of the obstacles that have to be overcome in the maintained sector. I would be looking for training to inculcate those sorts of skills in teachers.
	This is a good amendment. It seeks to give some guarantees on quality. We have had debates during this Report stage on the weakening of admissions and on some schools being exempted from inspection by Ofsted. We seem consistently to be weakening some of the measures and guarantees of quality in order to pursue and make a success of this free school policy in terms of numbers and flexibility. If we are to go with the free-market approach to education, we need to hang on all the more tightly to guarantees of the quality of the workforce, the quality of the inspection and fair admissions. We have also talked about fair funding. In the end, I will always come back to this in debates on this Bill: I fear that unless we can give some guarantees about the workforce being qualified, we will lose quality in some of these free schools.
	In the United States, some of the charter schools were set up with the best of intentions by parents who were dissatisfied with what was going on locally. They might think, "Well, I'm okay as I have done a bit of home education myself. I'll rock up and teach-it'll be fine". They are very well intentioned, and it might be fine for their kids, but I am not persuaded that it is fine. The experience of so many charter schools in the United States is that it is not fine; so many of them have failed. There are some great ones, but many of them are not great. I do not want to take that risk in this country.

Lord Northbourne: My Lords, this suggests that teaching is not entirely about qualifications; it is also a gift of God. However, that was not what I intended to ask. I wanted to ask the mover of the amendment what is meant by "non-specified work"? I am concerned -so are the Government, and indeed we should all be concerned-about, for example, those who do not have a tendency to be very successful in academic qualifications and who need to get fulfilment in life from their work, or from other skills. Why should not someone be taught to use a lathe by someone who is brilliant at using a lathe, rather than by someone who has an academic education? Or perhaps I have got it wrong.

Lord Sutherland of Houndwood: My Lords, this is an amendment about professionalism, and I think everyone who has spoken supports the importance of professionalism. I commend the Government for what they have done in this area already, as well as the previous Government, as important things were done then.
	However, I have reservations about a universal requirement for a particular kind of qualification. If we take the example of health, I would not mind being nursed by a nurse who was not a graduate, although actually these days, that does not seem to be on. I do not want to push that analogy at all, but to point up the remarks of the noble Baroness, Lady Perry: there may be exceptions. There may be individual cases that, if we were too rigorous, would be excluded. However, the question-which I believe has just been raised -is of proportionality, and whether it can become disproportionate in, for example, free schools.
	There is a real danger there, and I have already expressed worries about inspection and exemption from inspection in these areas, which is why I think the questions raised by the noble Baroness, Lady Walmsley, are fundamental. I approve of the use of the word "normally" here, and I wish it was in more legislation, but "normally" must then be monitored. I hope there are clear answers to the questions that she has asked.

Lord Storey: My Lords, I have said before in this House that the most important thing for a student is the quality of the teacher-not the qualifications, necessarily, but the quality. There can be the best buildings, the best resources, but unless there is quality teaching, then that child will not be able to make the progress that they deserve. If you have poor teaching and a poor teacher, that child loses the year, and the year can never be repeated. It is lost for good.
	Since I have come to this House, the one thing that has struck me in education debates is that in every speech and contribution I have heard, the child is at the centre. I have felt quite emotional, to be honest, about the care that has come to me from the comments that people have made. We had a debate on special educational needs, and I was absolutely stunned by the remarkable contributions from everybody in this House.
	However, one thing said constantly in that debate was that it needs to be about training, and about understanding the child. You cannot just put anybody in and expect them to be able to teach, understand, and relate to the child. It has to be a whole package. That is not to say that everybody must be a qualified teacher. There are examples of people who have a natural gift for teaching but are not qualified. How do we make that system work? Well, we have a system presently that allows that to happen.
	I speak from practical experience. At the tail end of the summer term, I had a situation in my school where a teacher left. Working in that classroom was a teaching assistant; an advanced, higher-level teaching assistant, who was-to use an expression-"stunning". The pupils thought the world of him. Being a conscientious, thoughtful person, I checked with my local authority, which said, "Yes, as long as he has a higher-level qualification and you're happy with him, he can take the class", which he did for three weeks. He was fantastic. The children progressed. I have to say, I would rather have had him than-no, perhaps I should not say that. He progressed and did incredibly well. He was also supported by the school and other teachers, who were able to compensate for any areas in which he needed to develop. As a result of that, he has decided that he will not just be a higher-level teaching assistant; he will go on to be a teacher.
	There are occasions when you can put people who do not have the formal qualifications in the classroom, and they can do a remarkable job. My noble friend Lady Benjamin constantly reminds me that pupils from the Caribbean often need a very different type of teacher, and that maybe the qualities that we currently have in our teaching profession are not always able to deal with those situations. That is dealt with, again, by encouraging teaching assistants who are working with teachers in the school environment.
	When the Minister replies I hope he will deal with the questions that have been asked by my noble friend Lady Walmsley. I also hope he will reflect on how we might combine both desires.
	I do not have a problem with free schools. I remember the first free school, which was Scotland Road Free School in Liverpool in the 1960s. What I have a problem with is saying that you can have non-qualified teachers in an educational establishment. If free schools are to be successful, they cannot be seen to be on the margins. Parents will soon think, "Oh, these are inferior places. They haven't got any qualified support in those schools". They will not send their children to them once the initial idea has started.
	I will make one further point. There are whole areas of teaching that, in a complex society and a modern world, people who work with children need to know about-safeguarding, for example. Are we saying that these adults who will teach in free schools will not have any training in safeguarding, or in the problems of special educational needs? The list goes on. We need to be absolutely sure that we get this right.

Baroness Morris of Yardley: My Lords, I also support this amendment, on which there is a fair degree of unanimity across the Chamber. My position is approximately the same as that of the noble Lord, Lord Sutherland. We do not want schools where everybody has the same qualification. Over the past 10 to 15 years, we have very much moved to having different qualifications in schools. Clearly, what we want is for someone to be qualified to do the job that we are asking them to do, and for people to know what they are qualified to do and what their training is. We have never had that in the past. We have been a one-qualification profession. We ought to be more like medicine and move away from that, to having a number of different qualifications.
	We have a record of getting this right. The movement of bursars into the maintained sector has been hugely successful, as have the teaching assistants and higher-level teaching assistants to which the noble Lord, Lord Storey, just referred. Therefore, we are on a journey of trying to get this right. The issue that faces us now is: where do we go next? I should have thought that where we go next is to look at the evidence of what has worked so far, the skills that are needed in the school and what training is needed. I absolutely accept that there will be some individuals who have experiences and a skill set that teachers and head teachers will want to use in schools. Some of them, as the noble Baroness, Lady Perry, said, will be absolutely excellent in their field. They may have a skill set that teaching would go alongside.
	There is a fair degree of unanimity across the Chamber over our vision of what we want schools to be like. Therefore, the question is whether the legislation that the Government are putting forward will arrive at that end. I do not think that it will. I cannot see why this big debate about how we get a qualified workforce-whatever the qualification may be-is being squashed into free schools. I would have thought the debate was bigger than yet another freedom that we can give to free schools. The debate is about the qualifications we need for all our schools, whether they be maintained schools, community academies or free schools. The Minister must address in his reply what this has to do with free schools. It has to do with all schools. I am not sure why he has cornered and corralled this debate into free schools. It is bigger than that.
	My second point is that the noble Baroness, Lady Perry, did not go on to answer the really difficult question about her own solution: how do we guarantee that only those people who are expert, brilliant and have the teaching skills as well get into our schools? There is no mechanism in the legislation as it is put forward to guarantee that.
	Our job as legislators is twofold, as a number of Members have said. It is to allow our children to benefit from people with different qualifications, but it is also to put some safeguards in, so that those who neither have those brilliant qualifications nor have a QTS are kept out of schools. Whereas the Government's amendment does not do this, the amendment that has been put forward by noble friend begins to do that. It acknowledges in the proposed new subsection (7) in the amendment that there will be people without QTS who can bring something to this business of education, but it offers a safeguard that even those people should be, in some form, under the supervision of somebody with a qualified teacher status. The noble Lord, Lord Storey, said that he managed this in his school last year, but the system and structure need to be managed. My plea to the Minister is to acknowledge the great progress that has been made on teacher workforce reform and to go along that road and not corral it into free schools in the name of extra freedoms for one group in schools. Our children deserve better than that.

Lord Lucas: My Lords, the man that my noble friend Lady Perry was remembering was Tristram Jones-Parry-one of the finest headmasters Westminster School has ever had. When he retired he was not allowed to teach mathematics in a state school, although he had taught it at Westminster. This illustrates how fatuous the current situation is.
	I am also worried about this amendment in terms of what the noble Lord, Lord Knight of Weymouth, was saying a few days ago on the way in which teaching will move as technology moves in. People outside teaching will become much more involved. There is a lot of demand from industry to get involved, say, in language teaching and make their staff available for language teaching. The situation is similar in technology. Certainly the teacher has a very strong role in supervising this, but some of the teaching will be done by people who are never going to be qualified; people who have no interest in becoming qualified and who are performing that function under the supervision of a qualified teacher.
	My suggestion to my noble friend is that the best way to tackle the concerns that have been addressed around the House is to make sure that anybody who asks can see a full list of the qualifications of every member of staff in the school. In this way, whatever decisions are being made by the head will be made in public and will be decisions that he or she will have to justify. That seems to me the best way to combine safety with the sort of flexibility that will let some very good people teach, despite their lack of some particular qualification.

Baroness Warnock: My Lords, I support what the noble Lord, Lord Lucas, has just said. In the case of languages particularly, it would be losing an enormously fruitful possibility to forbid teachers of foreign languages to teach because they had no qualification. There are many people who come over to this country who would be very good teachers but have no qualification-a wife of somebody who is doing a professional job, for example-and they would be an extraordinarily good resource to be able to use. The question of supervision is, of course, enormously important. The other area where we would lose a great deal is that of music. A lot of professional musicians do not take a teaching qualification.
	There are born teachers who love teaching and teach extremely well, but who do not want, or are too old to take, a teaching qualification. They should not be forbidden in our schools. We need lots of flexibility here. It is the attitude of the person to his or her pupils that is important, not a formal qualification. I strongly support what the noble Lord, Lord Lucas, has just said.

Baroness Benjamin: My Lords, many Afro-Caribbean families feel that their children are not being served well in schools. We all know that and it goes without saying. A lot of parents believe that the opportunity to have a free school is one advantage that will give their children an opportunity to have a fulfilled relationship in the classroom, as the noble Lord, Lord Knight, said. Having a teacher who is perhaps not fully trained is an opportunity to make sure that those young people who need just a bit of understanding and care can feel that the way that they are thinking and feeling is being embraced. Free schools have given them that opportunity, and if the teacher is not qualified-as we have heard from many noble Lords in the House-we will be doing a great service to those young people in our society who feel excluded in many ways.

Lord Hill of Oareford: My Lords, I agree with the noble Baroness, Lady Morris, that this has been an extremely good and interesting debate, and I am grateful to all noble Lords who have spoken from a range of different perspectives, and for some of the advice that I have received, which is helpful. At issue here is, in some way, a distinction between quality and qualification. There is complete agreement that we want the highest possible quality; the difference of opinion is whether the only way that the highest possible quality can be secured is through a specific qualification. I think I sum the mood up accurately by saying there is a feeling that quality is not defined only by one specific qualification.
	It is certainly the case that improving overall teacher quality is very much at the heart of what the Government are trying to achieve through their education reforms. I agree with what all noble Lords and the noble Baroness, Lady Jones of Whitchurch, have said about the importance of teacher professionalism. Across the piece, the Government are introducing a range of reforms to try and raise the status of the profession. We are reforming initial teacher training, trying to ensure that we attract more top graduates, strengthening teachers' powers and authority in the classroom, and streamlining performance management arrangements.
	We think that qualified teacher status has an important part to play in the teaching profession. That is why, in March, we set up a review of teacher standards, led by Sally Coates, to make all teacher standards, including those that underpin QTS, clearer and more focused. The review recommended revised standards that will take effect from September 2012 and raise the bar for entry to the profession.
	We certainly think that qualified teacher status has an important role in the system, but we think that it is possible to be an outstanding teacher without having QTS. A number of noble Lords spoke during our debate in Committee and again this afternoon about the value that individuals from a range of backgrounds, experience and expertise can bring to the classroom. It is true that under current arrangements such individuals can already bring their experience to bear in the classroom, but to a limited extent. Broadly speaking, they may only assist or support the work of a teacher with QTS and must be directed and supervised in doing so.
	The core purpose of the free schools programme that lies at the heart of the issue is to make it easier for parents, teachers and others to set up new schools in response to demand from their local community for change in education provision in their area. That is the basis upon which free school proposers set out their educational vision. We want to give them the ability draw on as wide a pool of talent as possible to deliver that vision. If a free school believes that that means including among its staff a teacher who has a wealth of qualifications, experience and expertise, but who does not have QTS, we do not want to prohibit the free school from doing so.
	My noble friend Lady Perry, the noble Lord, Lord Sutherland of Houndwood, the noble Baroness, Lady Warnock, and my noble friend Lady Benjamin all spoke persuasively about the need for some degree of flexibility. The kind of example that we have in mind would be that a free school might want to employ an experienced science teacher from the independent sector who has a strong track record of preparing pupils for top universities. That would be one example. We have a free school proposal from a group of independent schools that wants to set up a sixth-form college in Newham to try to get more children from disadvantaged backgrounds to go to top universities. My noble friend Lord Lucas mentioned another example in which the former head of Westminster School was caught by the rules. A free school might want to employ an engineer with a background in training and instruction to teach an engineering technical specialism.
	Free schools know that recruiting high-quality teachers will make the biggest difference to the quality of education that they can provide for their pupils. Therefore, I believe that they will themselves want to ensure that the staff that they recruit have the right knowledge and skills, and that relates to the point that my noble friend Lord Storey made about how free schools will be accountable and what mechanisms will be in place to make sure that they want to employ the best possible teachers. As part of their application to the department to set up a free school, proposers have to set out how they will deliver the highest quality of teaching and leadership in their schools, and no school is allowed to proceed without robust plans for doing so.
	Because they are new schools set up in response to parental demand, free schools are likely to have a particularly close relationship with parents, who, we believe, will hold them sharply to account for the quality of teaching. They will be subject to the same Ofsted inspection regime as all maintained schools. They will have a pre-registration inspection before they open and a full inspection by the end of their second year of being open.
	My noble friend Lady Walmsley, with support from the noble Lord, Lord Sutherland of Houndwood, asked, importantly, how we would know what was going on. I would answer that, in part, by talking about the publication of results and parents holding to account, but it is also the case that staff employed in free schools who do not have QTS will be monitored through the school workforce census, which takes place once a year. The results of that will be published on the department's website and we will all be able to see the extent to which this is happening or not happening.

Lord Knight of Weymouth: Beyond saying that there is quite a lot of flexibility in the proposal, can the Minister tell us whether the publication of the number of unqualified teachers in free schools would feature on the Ofsted risk assessment that we talked about last week? If there were a large number of unqualified teachers in a free school, that would mean that Ofsted would be keeping a closer eye on them.

Lord Hill of Oareford: I do not think that that would necessarily be the case. For that to be so, one would have to accept the premise that, for example, an extremely experienced science teacher with a long record of preparing children to go to university or someone with an engineering specialism was innately a greater risk to teaching standards than someone with QTS, and I do not believe that that is the case. However, we would have the data on the numbers. The early evidence from the first 24 free schools is that a minority are availing themselves of the freedom. We will see how that develops and, in response to the point raised by my noble friend Lady Walmsley, the information will all be out there in the public domain for people to see.
	A particular concern was raised by my noble friend Lord Storey about safeguarding, and I hope that I can reassure him. Free schools will certainly need to have regard to the statutory guidance on safeguarding. The guidance says that all staff should undertake appropriate training. It also says that a senior member of the school's management structure should have lead responsibility for dealing with child protection issues and liaising with other agencies where necessary. Free schools, like any other schools, have a statutory duty to undertake CRB checks on all members of staff. Free schools are required by their funding agreements to appoint a SENCO and a designated teacher with responsibility for children in care who hold QTS.
	The Government do not think that giving additional flexibility to a small group of schools for a particular reason is a new idea. When the previous Government introduced academies, for example, they gave them a number of freedoms, such as the one to depart from the national curriculum. I do not think that in essence this issue is different. It is a permissive measure. There are accountability measures and I think that safeguards are in place. I therefore ask the noble Baroness to withdraw her amendment.

Baroness Jones of Whitchurch: My Lords, as other noble Lords have said, we have had a very good and wide debate on this issue. I ask noble Lords to read the wording of our amendment because it is not as stark as some people would have us believe and we have tried to craft the wording carefully. It is not saying that only qualified teachers can teach in the classroom. It says that people with all sorts of skills can come into the classroom-they can be inspiring leaders, or as the noble Lord, Lord Northbourne, said, they can be specialists in teaching children how to operate lathes. All those people have a role in the classroom, but the wording of our amendment is that they have to be supervised by a qualified teacher. We feel that that is vital because of the arguments that have been made around the Chamber this afternoon.
	You can be the best specialist in the world at maths, science or whatever, but you need to have some teaching and education in child development, behavioural issues and the different ways that people learn, adapt and interact with each other and a whole range of SEN issues. I do not think that someone who has had a professional job outside teaching would necessarily understand or know about those issues. The issue, which is carefully spelt out in our amendment, is that those people should have a role but that they should be supervised by somebody with qualified teacher status.
	At the moment the proposals are at the margin; we are talking only about free schools and it may apply to only a handful of teachers. What signal is that sending? As a number of noble Lords have said, if this is so wonderful-as the Minister said, let us access the greatest pool of talent-will the Government say, "Great, let us extend that beyond free schools"? That is a very dangerous road to go down because, as people have rehearsed round the Chamber this afternoon, the issue of professionalism and driving up standards should be at the heart of what we are doing. We should not be trying to undercut and undermine the profession by deprofessionalising it.
	The core point that I put to the Minister, which he did not really answer, is: where is the evidence that unqualified teachers provide better education than qualified teachers? The Secretary of State has put great onus on this in a number of his speeches. He likes research and likes everything to be evidence based, but that strikes me as being a stab in the dark. There is no evidence that in the independent sector it is the fact that teachers are unqualified that drives up standards. I am not convinced from what the Minister has said that there will be sufficient monitoring. It is almost as if we are entering a wild experiment with no terms of reference, no end date and no assessment of whether the experiment has been successful. We are doing that at the expense of a generation of young people, whose education could potentially be damaged by this.
	For all those reasons, the proposals are going in the wrong direction. Our amendment says that there should be a qualified teacher who oversees the work of what happens in the classroom. That is a perfectly reasonable thing to request and it is in all pupils' interests. I am not convinced by the Minister's argument this afternoon, and I beg leave to test the opinion of the House.

Division on Amendment 84A
	Contents 174; Not-Contents 234.
	Amendment 84A disagreed.

Clause 55 : Academies: consultation on conversion
	Amendment 84B
	 Moved by Baroness Jones of Whitchurch
	84B: Clause 55, page 45, line 40, leave out from "England" to end of line and insert "applies for an Academy Order, there must be a consultation on the question of whether the conversion should take place.
	(2) The consultation must seek the views of such persons as the person carrying it out thinks appropriate, but must include the views of parents of registered pupils, registered pupils, school staff and the local authority."

Baroness Jones of Whitchurch: My Lords, under existing legislation, before a maintained school can convert into an academy, its governing body must consult those it thinks appropriate on whether the school should convert into an academy. However, Clause 55 allows a school to convert into an academy with absolutely no consultation with the pupils, the parents of the pupils, staff, the local authority or other interested groups. Our amendment would require consultation before a school applies for an academy order and require that consultation to seek the views of four categories of stakeholders: parents, pupils, school staff and the local authority. We regard it as a matter of courtesy, democracy and common sense.
	As we made clear in Grand Committee, we do not seek to set out in legislation a long list of everyone who should be consulted, but it is our view that any Secretary of State considering granting an academy order would need to be assured that the views of the four keys groups were being taken into account, so any consultation should be required to include them. Indeed, the Minister said to my noble friend in Grand Committee:
	"I agree with the noble Baroness, Lady Hughes, that it is quite difficult to foresee situations where it would not be appropriate to consult the kinds of people that she mentions".-[Official Report, 14/9/11; col. GC 242.]
	I wonder whether, on reflection, the Minister has come up with a possible situation in which it would not be appropriate to consult these four groups and, if not, whether he will concede that, in order for any Secretary of State to make a well informed decision, these groups should always be consulted.
	I also agree with the concerns previously raised by the noble Baroness, Lady Walmsley, that under the new proposals one of the bodies allowed to carry out the consultation, apart from the school's governing body, is the organisation with which the Secretary of State proposes to enter into an academy arrangement. As she rightly pointed out, this is no guarantee of an objective or neutral consultation. We therefore believe it is important to build in some additional checks and balances to ensure that a new academy is truly desired by the local community. By requiring the consultation to include the views of these four key stakeholder groups-pupils, parents, staff and the local authority-those applying for an academy order will need to demonstrate to the Secretary of State that there is local demand for the conversion, not just from the organisation with which the Secretary of State has proposed to enter into academy arrangements but from the wider stakeholder community. If this clause was allowed to go forward unamended, it would be yet another example of those stakeholder groups being denied a voice.
	I recognise that, strictly speaking, the granting of an academy order enables a school to convert into an academy only at a future time; it does not automatically trigger conversion. By denying the chance for parents, pupils, professionals and the community to have a voice before the academy order is made, to a large degree it presents them with a fait accompli. Indeed, our amendment would ensure that the key stakeholders were consulted on a timely basis so as to be able to influence a decision whether or not to apply for an academy order. It would mean that the Secretary of State would need to take account of those views when deciding whether or not to grant that order.
	I hope noble Lords will recognise the sense and the democratic underpinning of this amendment. I beg to move.

Baroness Walmsley: My Lords-

Lord Hill of Oareford: Perhaps I could say a couple of words now and obviously reply at greater length later. There are a couple of government amendments in this group.
	Amendment 84C in my name is a technical amendment. It clarifies the Academies Act 2010 by removing any doubt about local authorities' funding powers in relation to academies. Under Section 6(2) of the Academies Act, a local authority must cease to maintain a school once it converts to academy status. This is because academies are funded directly by the Secretary of State. However, in certain circumstances, local authorities might still want or need to assist academies: for example, where an academy is part of a private finance initiative contract held by the local authority. When a PFI school becomes an academy, it remains part of the PFI contract and as part of that contract the authority makes regular payments to the contractor in respect of that academy. It meets these payments from a combination of sources: funding from individual schools' budgets, including a contribution from any PFI academies; revenue funding from the department; and funding from its own resources. When a PFI school becomes an academy, we ensure that the local authority is in a "no better and no worse" position in relation to the PFI contract than if it had remained a maintained school.
	As I explained in my letter of 19 October to the noble Baroness, Lady Hughes of Stretford, a number of banks that finance PFI contracts have expressed concerns about whether local authorities have the legal power to make payments in relation to PFI academies. The Government believe that local authorities do currently have the power to assist academies financially or otherwise. However, we recognise the demand for this point to be put beyond doubt, which is what Amendment 84C seeks to do. The amendment clarifies local authorities' existing powers in relation to academies; it does not place any new requirements or duties on local authorities. In order to provide clarity as early as possible, the amendment to Clause 78 provides for this new clause to come into force on Royal Assent.

Baroness Walmsley: My Lords, I apologise to my noble friend the Minister for standing up too soon.
	I want to address the amendment in the name of the noble Baroness, Lady Jones of Whitchurch. Of course, this subject was discussed at very great length during the passage of the Academies Bill through your Lordships' House. I agree with the noble Baroness that it is good practice, prior to making an application, for the proprietors of an academy to consult all the groups she has mentioned, and probably many others too. All those groups would have a justified complaint to the school if they were not consulted. The Act says that appropriate groups should be consulted, and there is no question that all those four groups are appropriate groups.
	However, I would like to ask the noble Baroness what evidence she has that over the last 12 months, say, academies have not been carrying out that best practice and have not consulted those very relevant and appropriate groups prior to making the application. If we are going to make a change, we should have the evidence that there is the need for a change. Perhaps she can supply that evidence when she responds, because I do not think there is any.

Lord Hill of Oareford: My Lords, as my noble friend Lady Walmsley has said, we debated these issues at length and amended the consultation requirements during the passage of the Academies Act, which was just over a year ago. The fundamental question today, as it was a year ago, is how much detail about consultation we should prescribe in statute. When we discussed consultation during the passage of the Academies Act, the noble Lord, Lord Adonis, shared with this House his experience of consultation on the academies programme. He argued that just because the detail of a process is not set out in statute does not mean that it does not happen in a comprehensive manner.
	Like the noble Lord, Lord Adonis, this Government do not believe that minimal legislation leads to minimal consultation, which was the point made by my noble friend Lady Walmsley. Also like him, and like schools and head teachers, we believe firmly in the importance and value of consultation. The department's website contains advice on carrying out all stages of the academy conversion process, including consultation. A departmental official liaises with every converting school and among other things advises it on ways to ensure a fair and open consultation.
	Ultimately, schools make the choice to convert and they are under a legal duty to carry out a reasonable consultation of appropriate persons. Given the variation in these circumstances, it is right that the school assesses, in carrying out its consultation duty, what is reasonable in its local community, rather than Ministers prescribing it from the centre. Once consultation is complete, it is the responsibility of the school to reflect on the responses and to decide whether to proceed with academy conversion. That will go ahead only with confirmation from the school to the department that it has carried out its legal duty to consult appropriate persons and that the school wishes to go ahead, having considered the consultation responses.
	The noble Baroness raised two issues about whom to consult and when the consultation should take place. In relation to whom to consult, we think that schools can be trusted to assess who the appropriate persons are to consult according to the circumstances and that in those cases the appropriate parties, as my noble friend has just said, will include parents, pupils and staff. If we have concerns that consultation has not been adequate-for instance, if parents have not been consulted-these concerns will be raised and dealt with prior to the funding agreement being signed.
	On the timing of the consultation, the noble Baroness pointed out that consultation should take place before a decision is made, and I agree. The consultation requirement in the Academies Act already reflects this principle. It requires that consultation should take place before a school is converted into an academy. As I think that the noble Baroness accepted, an application for an academy order is a procedural step and does not signify a decision that the school should become an academy. That does not take place until the funding agreement is signed, which may happen many months after the issuing of an academy order. With that in mind, both last year and still now, it seems right that the school can carry out its consultation and reflect on the responses to it right up until the point at which it decides to become an academy and signs the funding agreement.
	We discussed consultation at length during the passage of the Academies Act but, as my noble friend Lady Walmsley has said, we have a key advantage now compared with when we last debated the issue a year ago. Our debate about the legal framework for consultation can now be informed by the experience of schools in implementing it. We have had around 1,100 academy conversions since the Academies Act was enacted. I would argue that for the noble Baroness, Lady Jones of Whitchurch, to ask the House to overturn the position it reached last year after a long debate, she would need to provide strong evidence that there is widespread disquiet about the consultation process. I do not think she has provided that evidence, and I think that that is because it does not exist. The department has had very few complaints from parents or other interested parties about the way that consultation has been carried out. This confirms my belief that the House got the issue right in the Academies Act 2010. I would therefore ask the noble Baroness, Lady Jones of Whitchurch, to withdraw her amendment.

Baroness Jones of Whitchurch: My Lords, I thank the noble Baroness and the Minister for their responses. Several issues are fundamental to this. The first is: how can we be assured that the Secretary of State is in the position to know that a full consultation has taken place? The guidance to which the Minister refers is fine, but we are seeking something that is more of a checklist setting out some of the fundamental rights for certain groups, rather than just the issuing of good practice and guidance. We feel that local democracy on this issue is important.
	Our amendment engenders bringing the consultation forward to an earlier stage. We feel that that is right because the evidence appears to be that people feel that once there begins to be a head of steam around a debate about whether there should be a conversion, even if it has not formally been made, it is nevertheless more difficult for local people to put a brake on it or to raise disquiet, or for them to have a voice that is heard.
	We do not believe that we have gone into too much detail. The Minister said that they do not want long lists. I said at the outset that we, equally, did not want a long list, but we did want to reassure some of the key stakeholders about their role in all this. As I say, this is very much about our belief in local democracy.
	The noble Baroness asked what evidence there was. I would say that that is something for the department to respond to. I am not in a position to collect evidence. I can say, anecdotally, that I know of parents and local authorities who feel that there has not been sufficient consultation. I think that in part the onus is on the department to measure the level of complaints, and the Minister could perhaps respond at some level on this.
	I do not think there is anything wrong with our amendment. I do not think that it is too detailed, that it expects too much of the legislation or that it spells out too much detail about what should be required. We have identified only four key stakeholders. This is, to us, a matter of principle. It would give enormous reassurance to people in the locality that their views will genuinely have a voice, and on that basis I beg leave to test the view of the House on this matter.

Division on Amendment 84B
	Contents 184; Not-Contents 218.
	Amendment 84B disagreed.

Amendment 84C
	 Moved by Lord Hill of Oareford
	84C: After Clause 56, insert the following new Clause-
	"Academy orders: local authority powers
	In section 6 of AA 2010 (effect of Academy order), after subsection (2) insert-
	"(2A) Subsection (2) does not prohibit the local authority from providing financial or other assistance in respect of the Academy, including by-
	(a) making payments in respect of some (but not all) of the expenses of maintaining the Academy,
	(b) providing premises, goods or services for the Academy, or
	(c) making premises, goods or services available to be used for the purposes of the Academy.""
	Amendment 84C agreed.
	Clause 60 : Staff at Academies with religious character
	Amendment 85
	 Moved by Baroness Turner of Camden
	85: Clause 60, page 49, line 1, at end insert-
	"( ) In section 59(1) of SSFA 1998 (religious opinions etc. of staff), after paragraph (b) insert-
	"(c) an Academy that is not religiously designated"."

Baroness Turner of Camden: I shall speak also to the amendments in my name with which Amendment 85 is grouped.
	I am attempting to follow up something which I began in Committee: I am endeavouring to protect the position of teachers in religiously designated schools from having religious views and requirements imposed upon them which they may not support. I am a secularist but I agree with the rights of both the religious and the non-religious. I accept that faith schools exist and are provided for in our legislation. My amendments do not alter that.
	I commended the previous Government when they first introduced academies that they also provided for the appointment of what is known as reserve teachers, who could be expected to teach religious education and instruction and to abide by the religious ethos of the school. They were, however, limited in number to one fifth of the teaching staff. The other teachers did not have to comply with this and there was no requirement that the head teacher should be a reserve teacher. It did not seem to me that these requirements under the Bill would apply to other schools, such as foundation or voluntary schools of a religious character, and my amendments in Committee were intended to do that. I have since studied what the Minister said in reply. I have had the opportunity, for which I thank him, of meeting him and his officials and I have made available to him a legal opinion supplied by the secular association. As a result, I have dropped some of the amendments I introduced in Committee and have attempted to concentrate on what I think spells out the best way of complying with the advice I have received and the requirements of European law.
	The first amendment seeks to give explicit statutory protection to teachers in community schools that become academies from being required to teach religious education. Many teachers with decades of experience do not wish to teach RE and there is no reason why they should lose the protection afforded to them by this section of the School Standards and Framework Act because of a change of the type of school.
	The next amendment, which is in two parts, makes it clear that while preference may be given in connection with the appointment, remuneration or promotion of teachers at a voluntary aided school on the basis of religious belief, this is only to the extent of it being justified as an occupational requirement having regard to the school's religious ethos. The second part provides that while termination or engagement of a teacher may have regard to compliance with the tenets of the religion involved, discrimination is nevertheless prohibited on grounds not allowed under our equality legislation, such as in relation to sexual orientation.
	The third amendment will put into legislation the commitment that the Government have already given that academies which were originally voluntary controlled schools should go through a consultation process similar to that in the maintained sector before being allowed to gain staffing and governance arrangements similar to those in voluntary aided schools.
	This may sound complicated because reference has to be made to legislation that already exists and the various schools concerned. However, basically it is quite straight forward. I want to ensure that teachers with no or perhaps different beliefs are not discriminated against as the Government and the previous Government provided quite specifically for faith schools to be able to discriminate in favour of teachers who share their religious outlook, but in line with specific arrangements and limitations on numbers, to which I have already referred. Otherwise, teachers will be recruited and employed on the basis of their ability to teach their particular non-religious subject and are no way discriminated against.
	My impression when I met the Minister and his officials was that these views were not opposed by the Government. I hope therefore that my amendments can either be accepted-if the Minister accepts the ideas involved-or perhaps he could produce alternative wording. As I have already indicated, the advice I have received indicates that my wording is in line with our own equality law and European law.
	Amendment 88 is grouped with my amendments and my noble friend will no doubt speak in favour of it. I fully support it. In the mean time, I beg to move.

Baroness Massey of Darwen: My Lords, I will speak to Amendment 88 in this group. I support my noble friend Lady Turner in her previous amendments. She has explained the issues very well and I know that she has had extensive consultation with the Minister on them. We have heard most, if not all, of her arguments before and I think that they are very powerful. I know that there is some sympathy for her arguments among various faith groups. While the issue is about religion, it is mainly, I think, about fairness and discrimination.
	In Amendment 88, my chief concern is the fostering of segregation in schools on the basis of religion. The change proposed by the Education Bill will make voluntary-aided faith schools the most attractive option to religious groups seeking to set up schools because they will be the easiest to set up. This is especially so if the local authority is readily in favour of the school, in which case proposals would be extremely likely to succeed. It is hard to see how this change is justified in light of the drive towards free schools and the fact that free schools cannot religiously discriminate in admissions for more than 50 per cent of their intake. Surely this is a reflection that faith-based admissions criteria should be curbed, not increased. This will increase religious segregation in admissions, extend discrimination against staff of no religion and increase the number of schools teaching faith-based religious education. I believe, as does the noble Baroness, Lady Turner, that all schools should include and educate all pupils together so that they can learn from each other instead of being segregated on religious and other grounds.

The Lord Bishop of Oxford: My Lords, Amendment 85, proposed by the noble Baroness, Lady Turner, seeks to make it plain that religious criteria may not be used to employ staff in academies without religious designation or to make it obligatory to teach RE in such a school. That seems to me to be unexceptionable and I wonder why the amendment is needed. If it seeks to achieve a result that we would all agree with, it does not seem to me to be necessary. Like all independent schools, academies may use religious criteria in employment only when they are designated as a school of religious character or when a genuine occupational requirement, such as being a chaplain, is shown. Amendment 85 seems to me to be unnecessary at best and potentially confusing at worst.
	In my view, Amendment 86 is more serious because it seeks to impose the genuine occupational requirement regime on to voluntary-aided schools, although strangely not on academies, as I read it. The occupational requirement is a substantially lesser power than that which currently pertains for VA schools and I believe that it is inadequate to protect these schools' faith-based ethos. Noble Lords will appreciate that the faith-based ethos of the school is central to its character and to its performance, which are closely linked. It is particularly important that the leadership of the school is on board with the foundation of faith, because from the leadership flow the shape and character of the school and from that character flow the performance and the standards of the school. We might also note that the commitment to the religious character of the school is necessary in order to fulfil the terms of the trust, which lies behind the school operating on that particular land. That is basic trust law, so we need to keep in line with that.
	I assure noble Lords that the governors' powers of appointment are used with considerable flexibility, sensitivity and discretion. It is far from the case that all staff are from the relevant faith background. Schools want the best person-the best teacher-and the faith commitment of a teacher is only one of many criteria. Local factors are always relevant. I also think that the risks of discrimination are much exaggerated or overstated. I have been able to find hardly any evidence of discrimination in practice. Why would a teacher entirely opposed to the faith basis of a school want to teach in that school? The dual system ensures that, for teachers and other staff, there is always a choice of schools of a different character.
	Amendment 86 also seeks to prevent religious reasons being used as a proxy for other kinds of discrimination. Sexual conduct is what the noble Baroness, Lady Turner, will have in mind. I am shocked at the very thought. Let me be absolutely clear: sexual orientation is not relevant and may not be taken into account in employment in a Church of England school. Sexual conduct can surely be taken into account in cases of alleged misconduct, and absolutely in the same way in relations between the opposite sex as the same sex. I therefore believe that Amendment 86 should be resisted.
	Amendment 87 seeks to impose a consultation if Section 124AA is to be disapplied by the Secretary of State, thus enabling a VC converter academy to have the employment powers of a VA converter academy. We understand that the Secretary of State will require a consultation anyway as a matter of guidance or of regulation. That is surely fine. There would have to be a consultation if a voluntary-controlled school wanted to become a voluntary-aided school. However, I suggest that it would be better to leave that matter for guidance rather than for legislation, especially in the light of the requirement by the noble Baroness, Lady Turner, that the Secretary of State have regard-that strange phrase-to the consultation, because goodness knows what that will be seen to mean in later years. I believe that this amendment should also be resisted.

Lord Deben: My Lords, I believe that these amendments should be resisted because they are discriminatory. I was fortunate enough to be able to pay for my children's education. I did so because I wanted my children to go to Catholic schools. I do not think that we should discriminate against poorer people who cannot make that choice. It is perfectly reasonable to choose that you do not want your child to go to a faith school, but to deny the right of people without the resources to choose a school in which the fundamentals are faith-based seems to me a retrograde action that is entirely unacceptable.
	It is perfectly reasonable to have some categories of school in which this issue does not arise. These amendments seek to limit even more those categories that exist at the moment. I say to those who put them forward that there is a new kind of illiberalism, which is very determined to remove from parents what for many of us is the most important element in education: we want our children brought in the fear and love of our Lord. We should have that right whether we are rich or poor. After all, it is the church that started education in this country and it is the church that has upheld that education. It is a historic agreement between state and church that has enabled us to have a society in which secular people and religious people can live together in harmony. The increasing demand of those who want a society in which their particular-I have to say-arrogant determination that everybody shall be educated in their way is wholly contrary to the liberal society that we have created.
	There used to be a very nasty phrase, "Scratch a liberal and you find a totalitarian". I am afraid that this is increasingly true in our society. People who claim to be liberal are determined that their liberalism shall-

Baroness Whitaker: I am in some difficulty, because I cannot find where in this group of amendments the right to choose which school children go to is taken away, to use the noble Lord's words, and where it is said that certain children have to be educated in their way rather than in the way the parents choose. Could he tell me which text he finds that in?

Lord Deben: I listened with very considerable care to how the amendments were introduced by the noble Baronesses. In both cases, the suggestion was that the kind of schools where teachers' religious beliefs were taken into account, apart from the chaplain or the like, would be schools of which they disapproved because they felt that it was better for children to be educated in circumstances in which there was a wide range of teachers with a wide range of views. I am merely saying that I want a society in which parents can choose and do not have that dictated to them by those who think it would be better for them to have a particular kind of circumstance. I am pleading for that on the basis of discrimination. I do not wish to discriminate against the poor. I am pleading for it also on the basis of liberalism.
	In a free society, people should have the choice to the widest possible degree. It is illiberal to say that a person's belief that a faith-based school is in some way-I think that the word was used, but I will not use it myself; I shall just say "restrictive", as it makes people unable to share in the rich variety of life. That is an unacceptable position in the sort of society that we have. Young people have a difficult enough time in any case in maintaining standards and values. They have a difficult enough time in any case upholding the faith in a society which is dedicated to its destruction, and parents and religious organisations, either Catholic or Anglican, wanting to make sure that they have the best possible opportunity, should be encouraged. These amendments make it more difficult and I therefore believe that they should not be supported.

Lord Avebury: My Lords, I have seldom heard a more hysterical and inaccurate speech than the one that we have just listened to from the noble Lord, Lord Deben, which is clearly based on a total misunderstanding of the amendments and of the motives of the people who tabled them. I do not think he can have heard what the noble Baroness, Lady Whitaker, said in her intervention-that Amendment 85 and the other two amendments have nothing whatever to do with the choices that parents make of the schools that their children will attend. I hope that he will think carefully about the remarks that he has made and, perhaps, hesitate on future occasions to leap in with the wild assertions that he made today.

Lord Deben: Will my noble friend give way as he has made a specific-

Baroness Garden of Frognal: I apologise to my noble friend, but under the rules of Report noble Lords may speak only once in the course of each amendment.

Lord Avebury: I had no objection to the noble Lord intervening, if that is what he was doing.

Lord Deben: I merely say to my noble friend that the point that I was making is that parents may wish to choose a school in which the restrictions on the choice of teachers expected under these amendments are not ones that they would wish. It is perfectly reasonable for them to choose those schools.

Lord Avebury: No one is suggesting that there should be any restriction on the right of parents to choose whatever school they think is best for their children. The noble Lord's remarks are based on a total misunderstanding of the amendment and what the noble Baroness, Lady Turner, said. But perhaps I may move on to the remarks of the right reverend Prelate the Bishop of Oxford, who I thought said that these amendments were fine but unnecessary. I am hoping that he is in support of the amendments proposed by the noble Baroness, Lady Turner, because surely there may be teachers who are not entirely opposed to the faith basis of a school who belong to other religions or none but have a particular aptitude for mathematics, say, or geography, and are therefore suitable for those subjects in the school, although it has a religious ethos. He said, rightly, that the schools would want to choose persons who were best capable of teaching the non-religious subjects and that they would not wish to discriminate in making choices when appointing those persons.
	I am afraid that we have made no more progress on the issues covered by the noble Baroness on religious discrimination than we did on collective worship since Committee, although, with the noble Baroness, I was grateful to the Minister for writing to us and entering into a detailed discussion with us in the interval between Committee and Report. The Minister will remember that he was handed a dossier of legal opinions, which the noble Baroness, Lady Turner, mentioned, including one commissioned by the Equality and Human Rights Commission that challenged the compatibility of the Schools Standards and Framework Act 1998 with the European Union employment directive. The focus of these opinions was Section 60(5). Looking back at the passage of this subsection through this House in 1998, I see that the original wording of the equivalent part of the Bill, then Clause 58(4), was entirely benign and unobjectionable. It provided that in a voluntary aided school of a religious character, no teacher of subjects other than religion would receive any less remuneration or be deprived of, or disqualified for, any promotion or other advantage by reason of his religious opinions or of his attending religious worship.
	The amendments to that clause, to which we are now objecting, turned the original words on their head by saying that preference may be given, in connection with the appointment, remuneration or promotion of teachers at a voluntary aided school which has a religious character, to persons whose religious opinions are in accordance with the tenets of the religion or religious denomination of the school. Those amendments were drafted following a delegation to the Home Secretary led by the then right reverend Prelate the Bishop of Ripon and Leeds, who acknowledged in the House that the amendments had been,
	"prepared in consultation with the Churches".-[Official Report, 4/6/1998; col. 576.]
	He understandably expressed his delight that the churches were "completely satisfied" with the amendments then inserted. No other amendments were made by any other noble Lord.
	Those proposals were made by the Church of England and accepted by the Government at the same time as the employment directive was being drafted in Europe to combat precisely that sort of unfair discrimination. They are the basis of the formal complaint lodged by the National Secular Society earlier this year to the European Commission, which I understand is still under consideration. If Section 60(5) is left alone, they may yet be the subject of litigation by teachers who consider that they have been treated less favourably than others in terms of their appointment, remuneration or promotion to posts involving the teaching of history, English or mathematics, for example, because they do not subscribe to the particular religion or denomination which gives the school its religious character. I suppose that the same would apply not only to Christian but also to Muslim schools, where a teacher might be discriminated against in the same way because he belongs to the wrong brand of Islam.
	The then Government compounded the offence of undermining the directive by insisting, at the 11th hour, as a condition of their acceptance of the directive, that previous legislation, including in particular the School Standards and Framework Act, should be regarded as being in effect exempt from the new directive. The Government were so desperate for unanimous agreement, as was required, that they were able to force the Council of Ministers to accept their demands.
	The noble Baroness, Lady Turner, has, on the grounds of pragmatism, gone only a modest way today to reverse these discriminatory 1998 amendments. I therefore appeal to the Government to recognise that these privileges granted to religious bodies create, as do all privileges, victims-those who would otherwise not have been disadvantaged. The innocent and undeserving victims of Section 60(5), which the noble Baroness seeks to replace in her Amendment 86, are teachers-there may be thousands of them-who are not of the faith of the publicly-funded school or academy where they teach or apply to teach subjects other than religious education.

Lord Touhig: My Lords, I have some concerns about these amendments, in particular Amendment 86 in the name of my noble friend Lady Turner of Camden and Amendment 88 in the name of my noble friend Lady Massey of Darwen. Amendment 86 would dilute the existing legislative protection which allows Catholic schools to give priority to Catholics when recruiting to any post, without the need to provide justification for doing so. That has been a long established practice and it is essential that such preference is given to ensure that the Catholic ethos, which is the whole basis of having a Catholic school, is allowed to continue and to be maintained and developed. I suggest to my noble friend that the proposed subsection (5A) in her Amendment 86 is unnecessary since schools with a religious character are already obliged to comply with the Equality Act 2010, which includes appropriate exemptions for such schools.
	Amendment 88 in the name of my noble friend Lady Massey of Darwen relates to voluntary controlled schools only. There are no voluntary controlled schools in the Catholic sector but this amendment would affect Church of England voluntary controlled schools which convert to academy status. These schools, which currently admit only a certain proportion of children of faith, would be prevented from increasing that quota except in specific circumstances. My fear is that if my noble friend's amendment was incorporated into the Bill it would pave the way for imposing quotas on all schools of a religious character. I do not think that is reasonable, right or just. From the point of view of the Catholic sector, this would certainly limit the ability of Catholic parents to send their children to Catholic schools. For that reason, I could not support my noble friend's amendment.

Baroness Garden of Frognal: My Lords, this debate allows us to return to the topic of faith schooling. As we have made clear in previous debates, the Government believe strongly in the role of faith schools in this country. As we have heard from my noble friend Lord Deben, faith schools existed before there was a state education system and have contributed a great deal to its development. As the right reverend Prelate the Bishop of Oxford set out, it is vital to faith schools that they are able to maintain their particular religious ethos and their ability to deliver the form of education which they have historically provided, and which parents want. We think the long-standing arrangements that provide for this are working well. The Government are therefore seeking to ensure that faith schools which seek academy status continue to have the freedoms they have previously enjoyed, subject to the same protections.
	Turning first to the issue of faith staffing, I am aware that the noble Baroness, Lady Turner of Camden, and indeed my noble friend Lord Avebury continue to have concerns with aspects of Clause 60, which seeks to replicate the staffing regime in voluntary controlled schools on their conversion to academy status. We are grateful for the discussions which the noble Baroness had with my noble friend the Minister on these issues and hope that the detailed letter sent to her and to my noble friend Lord Avebury on 5 October provided some reassurance on this matter. My noble friend referred to that letter in the course of his comments. We agree with many of the sentiments expressed by noble Lords today. The issues are really therefore more technical ones, about how these sentiments can best be given effect in law.
	We agree with the intention of the noble Baroness, Lady Turner, that staff in non-religious academies should be protected from discrimination on the grounds of religion, including from being asked to teach RE against their will. The purpose of religious education in a non-religious academy is to provide pupils with an understanding of the practices and beliefs of all the major religions represented in England. No teacher in such an academy could therefore be asked to teach RE according to a particular creed or in a way that would conflict with their conscience. We are not aware of any academies where the issue of having to deliver broad, non-denominational religious education has been a problem. However, should this happen, the provisions of the Equality Act 2010 mean that no teacher in an academy without a religious ethos can lawfully suffer less favourable treatment because of their religion or belief. The Government are satisfied that adequate protections are already provided by equalities and employment legislation, and therefore that a specific replication of Section 59 of the School Standards and Framework Act 1998 is not necessary.
	Amendment 86 focuses on existing practices in voluntary aided faith schools. These are long-standing practices, which provide a common-sense approach to maintaining the religious ethos of faith schools and we see no reason to change them. Parents choosing to send their children to a faith school do so with the understanding that their children will be in an environment which reflects their religious principles. It is therefore right that voluntary aided schools are allowed to recruit staff to ensure they can provide such an environment. Regarding the second part of the amendment, I understand that there are fears that Section 60 of the SSFA could be used by a school as justification for discriminating against a teacher because of his or her sexual orientation. I very much hope and believe that no school would ever try and use a person's sexuality as a reason for employing or dismissing them, or for treating them any differently from any other member of staff. But let me be clear: the exception under the Equality Act 2010 is intended only to permit discrimination on the basis of religion or belief, not on the basis of any other protected characteristic such as gender or sexual orientation. Discrimination on the grounds of sexual orientation would quite simply be unlawful.
	In relation to Amendment 87, we agree with the noble Baroness that no school, whether an academy or not, should be able to change from the staffing arrangements for voluntary controlled schools to those for voluntary aided schools without due process. The policy statement setting out how this clause will be used in practice, and which the House has already seen, clearly sets out the Government's intention that the Secretary of State will use this power only when a school can show evidence that it has carried out a reasonable consultation on a proposal to move from minority to majority faith representation on the governing body, as the right reverend Prelate set out in his remarks. Where the noble Baroness and I differ in opinion is on whether this requirement needs to be prescribed in legislation. The Government's preference is always to keep the detail in legislation to a minimum.
	The noble Baroness, Lady Massey of Darwen, has proposed a new clause after Clause 60 which would seek to restrict voluntary controlled schools' admissions arrangements on conversion. At present, any maintained faith school is able to select up to 100 per cent of its pupils based on faith, subject to being oversubscribed. As noble Lords are aware, maintained schools converting to academies retain the school's current admission arrangements when they go through the conversion process. We want to ensure parity across faith schools in the maintained and academy sector. Conversion to academy status is not a means of changing admission arrangements at a school.
	I am aware that the noble Baroness has concerns about what may happen to a school's admissions arrangements following academy conversion. It is of course possible, as in the maintained sector, that the academy trust may consider changing its oversubscription criteria. However, if an academy wanted to change its admission arrangements following conversion then, as in the maintained sector, consultation would be required and parents would be given an opportunity to object to those changes. We believe it is valuable for maintained schools and academies to have this flexibility to propose a change to their admissions criteria, should it be perceived necessary and valuable to do so. The noble Baroness's amendment would remove that flexibility for voluntary controlled schools that have converted to become academies, fixing their admissions arrangements to those that existed on the point of conversion. This would leave them unable to respond to changes in local communities-something that voluntary schools can do in the maintained sector.
	I appreciate that the noble Baroness, Lady Massey, may have concerns that in the case of voluntary controlled schools, the admissions authority will change on conversion from the local authority to the academy trust. She may also be concerned that this will bring a different approach to admissions policies that would lead to a rise in selection on the basis of faith criteria. I hope I can provide some reassurance to the noble Baroness on this point. First, in terms of practicalities, I want to make clear that no school can select pupils on the basis of faith unless it is oversubscribed. Secondly, I want to underline that admission arrangements can be changed only following consultation with parents. We are also well aware of the views expressed by the Church of England on admissions, which expects Church of England schools to serve the whole community, rather than a particular section of it. That would suggest that academy conversion is unlikely to result in a sudden increase of faith-based admissions criteria. Finally, the conversion process ensures that voluntary controlled schools continue to have only minority church representation on their academy trust. It is not right to assume that they are likely to act to increase faith admissions.
	Before I close, I would refer to a concern of my noble friend Lord Avebury about the School Standards and Framework Act 1998, and the European framework directive. We do not accept that there is a contravention of the directive. Article 4.2 of the directive provides that,
	"Member States may maintain national legislation in force at the date of adoption of this Directive",
	and it also allows for future legislation to allow differential treatment on religious grounds where it reflects national practices, and where there is,
	"a genuine, legitimate and justified occupational requirement".
	My Lords, I assure you, once again, that the Academies Act and the changes being made in this Education Bill seek only to maintain the status quo. I hope therefore, that the noble Baroness, Lady Turner, will accept my assurances, and I urge her to withdraw her amendment.

Baroness Turner of Camden: I thank all the noble Lords who have contributed to a very interesting debate. Of course, a lot of it I did not agree with, including the strange argument produced by the noble Lord who said that I was seeking discrimination; the reverse is true, of course. I was hoping to get agreement from everyone that, while accepting that there are faith schools and that people have the choice to send their children to these schools if they wish to do so, we should ensure that people who do not necessarily participate in support for that faith are not discriminated against. I thought it was quite straightforward, and I am very glad that a number of people seem to agree with that view. I thank everybody who participated, particularly the noble Lord, Lord Avebury, who as usual produced his very strong arguments in favour of the position that I had taken up on the employment of teachers and so on.
	I thank the noble Baroness very much for the assurances she has given me this afternoon. I am glad-and I had the impression when I met the Minister originally-that there was no opposition to what I was proposing, and that it was simply felt by me and other people that we wanted it in this Education Bill. Obviously, teachers will refer to the Education Bill as their basis, so to speak, so I thought it a good idea to have it all in the same Bill. In view of what the noble Baroness has said this afternoon, I simply thank her very much for the assurances that she has given, which will be on the record. I am very grateful for them. In those circumstances, I beg leave to withdraw the amendment.
	Amendment 85 withdrawn.

Amendment 86 to 88 not moved.
	Clause 62 : Academy admissions arrangements: references to adjudicator
	Amendment 89
	 Moved by Lord Hill of Oareford
	89: Clause 62, page 51, line 6, leave out paragraph (b)
	Amendment 89 agreed.
	Clause 67 : The apprenticeship offer
	Amendment 89ZZA
	 Moved by Lord Young of Norwood Green
	89ZZA: Clause 67, page 53, line 26, at end insert-
	"( ) The Secretary of State will make available the apprenticeship offer, and will ensure that progress is made to ensure the offer is available, to all qualified persons by 2015."

Lord Young of Norwood Green: My Lords, I shall speak also to Amendments 89ZZAA, 89ZZAB, and 89ZZB. Before I get into the nub of the argument, I wish to remedy an omission. In Committee we failed to acknowledge the appointment of the noble Baroness, Lady Verma, and congratulate her on it. Better late than never; please accept our profuse apologies. I did make an extensive case in Committee-and the noble Baroness, Lady Garden, told me in an interval that it was verging on being too extensive-so she will be relieved to know that I will not repeat all the arguments. However, I believe these amendments to contain some very important principles.
	To give some background: the first amendment is on the entitlement, committing the Government to make available an apprenticeship for all qualified young people in the 16 to 19 group by 2015, and is against the background of youth unemployment reaching record levels of nearly a million. Even if we take away those in full-time education, it is still historically a very high figure.
	As I said in another debate recently, it is interesting that when young offenders were asked what one thing would contribute to changing their behaviour and way of life, a job, or the promise of a job, was probably the most influential factor. Again, as I have said previously, I welcome the Government's commitment to apprenticeships-I believe that to be genuine-but the current strategy is failing. Its delivery is mainly to adult apprenticeships-that is, those in the 25-plus age range. I do not denigrate that, in one respect, because it is a useful means of people re-skilling, but it does not address the very serious problem of youth unemployment.
	If we look at the most recent statistics, we see a decline in the increase in apprenticeships from 17.5 per cent to 10 per cent for 16 to 18 year-olds, and from 34.3 per cent to 22 per cent for 19 to 24 year-olds. In the very area which I regard to be the most vital area of apprenticeships, we are seeing a significant slowing down. Again, I do not want to go over the whole economic case, but we believe that if the Government had adopted Labour's five-point plan to create jobs and growth, which includes a tax on bank bonuses to fund 100,000 jobs for young people, that would make a significant improvement.
	Is it possible to meet the entitlement? Clearly, we believed it was, as a Government: we put it in the previous Apprenticeships, Skills, Children and Learning Act, and we made the commitment to achieve it in 2013. We recognise the difficult employment situation, which is why we have extended the target to 2015. Is it possible to achieve it? I believe the answer has to be yes.
	When I looked at the Government's response to this question, I must admit that I found it to be very cautious-that is the kindest euphemism I could put to it. It says that the Government will make "reasonable efforts" to secure that employers participate in the provision of apprenticeship training for all persons. I should hope that they would. But "reasonable efforts" does not really convey that sense of urgency, commitment and determination that we need, and that the Government need, if they are to signal to young people out there that they are determined to do something about the appalling levels of unemployment; and determined to show to young people that if they are able to qualify for an apprenticeship, there will be one available to them.
	What has to be tackled is the continuing failure by the majority of employers to understand the benefit of apprenticeships. They are still seen by many as a burden rather than a benefit, yet all the evidence shows that once employers get the message they understand the benefits that apprenticeships can bring. Can it be done? Yes, I believe it can. I have mentioned previously the use of group training associations and apprenticeship training associations. Both approaches need to be significantly expanded if we are to meet this challenge.
	The Government must lead by example. They must signal to employers that if they bid for public procurement contracts-I am speaking here to Amendment 89ZZAA -they will be required to indicate how many apprentices they would be prepared to take on if they were awarded that contract. When we were in government we indicated that we would make that a stipulation. I cite two current examples, which I do not apologise for citing again. The Olympics was a good example of where we had to work very hard to ensure that employers understood that, if they were going to bid for an Olympic contract, apprenticeships were part of that bid. A significant number-more than 300-were achieved. Similarly, Crossrail indicated that it would be prepared to take on 400 apprentices. It can be done. There was no legal obstacle to it.
	After a meeting with the Minister, I was told that there would be some kind of reconsideration. However, I have been advised verbally that that will not be the case and the Government are not prepared to make an absolute commitment on the question of public procurement contracts. That is a real missed opportunity. It gives employers the worst possible indication-that there is no determination by the Government to ensure that apprenticeships are seen as a key part of bidding for any public procurement contracts. When we think of the hundreds of billions of pounds of public money that go into these contracts, surely it is not too much to ask.
	I have not heard many arguments against it. There was one to do with SMEs: I was told that the Government want to encourage small and medium-sized enterprises to bid for public procurement contracts. I agree with that; so do we. But why should we signal to SMEs, which, after all, are the very companies that we need to convince, that apprenticeships are somehow seen as a burden rather than a benefit? It gives the wrong signal and is, again, a missed opportunity by the Government.
	I turn to government departments. If we ask this of employers, then the Government need to monitor their departments carefully-on a monthly basis, I would say. Again, they should make sure that it is not just adult apprenticeships that are being recruited into government departments. I know that there are restrictions on recruitment but the Government have said previously that apprenticeships would not be subject to that restriction. Therefore, I would welcome some positive statement on that.
	That brings me to my last amendment in the group, Amendment 89ZZAB, which says:
	"To gain the Investors in People award companies must demonstrate their commitment to apprenticeships".
	I must admit, I was astounded when I went to an Investors in People awards ceremony a couple of years ago to find that one company that had achieved an award had no apprenticeships at all. It seemed to be a contradiction in terms, to label yourself an investor in people yet somehow fail to understand the benefit and importance of apprenticeships. Again, this is a perfectly reasonable requirement.
	I indicated that I intended to be careful about the length of my contribution because some, if not all, of these arguments have already been made. I look forward to hearing the Government's response. I beg to move.

Baroness Verma: My Lords, I should like to speak to the government amendments in this group, tabled in the name of my noble friend Lord Hill. These amendments are the outcome of a great deal of work and good will on the part of the noble Lord, Lord Layard, and his colleagues, my noble friends Lord Wakeham and Lord Willis and the noble Lord, Lord Sutherland. I am extremely grateful for their efforts and pass on the thanks of my honourable friend the Minister for Skills, who heartily welcomes the amendments.
	The amendments go to the heart of what needs to happen to expand the apprenticeship programme and create more opportunities. Amendment 89ZZB places a new duty on the chief executive of skills funding to "make reasonable efforts" to secure employer involvement in apprenticeship training for a broad class of people made up of all the groups covered by the apprenticeship offer. It also specifies that the guidance that the Secretary of State can issue to the chief executive must include guidance on carrying out that duty. It strikes the right balance between aspiration and pragmatism and complements the new duty on the chief executive of skills funding to prioritise funding, making the Bill even better legislation. Therefore, I urge your Lordships to support these amendments. I will of course respond to the noble Lord's questions and arguments if other noble Lords do not speak.

Baroness Wall of New Barnet: My Lords, I, too, have put my name to Amendment 89ZZA. I welcome the opportunity to extend the congratulations that my noble friend Lord Young extended to the noble Baroness. I am sure she will be an asset to the team.
	I just want to add to more or less everything that my noble friend said in the context of apprenticeships. What surprises me is the semi-reluctant manner in which the Bill is worded. It does not reflect at all the ambitions that the Government talk about in the goals that they have set to achieve apprenticeships or, perhaps more importantly, the way employers constantly remind the Government of the importance of apprenticeships. I know that my noble friend Lord Young referred to employers who still feel that apprenticeships are a burden. However, there are hundreds of employers who see them as an advantage to their businesses and have a real commitment to them. They feel that the Government may be saying one thing but doing another. That is, to say the least, very unfortunate, since apprentices are the core of major businesses.
	My own experience is in the engineering sector, as noble Lords will know. Outside that sector, apprentices are now becoming much more important to the hospitality sector and others. Therefore, it surprises me that mixed messages are going out, the result of which is very confusing. I welcome what the noble Baroness said in responding to my noble friend. However, stronger language could be used in the drafting of the Bill-words such as "encourage" rather than "take note of" or other such phrases that are used in the Bill. Anything that can strengthen the enthusiasm that is out there is important.
	My noble friend made particular reference to and emphasised the young apprentices who are coming in. There are major issues around young people not being able to engage with apprenticeships, although there are lots of schemes. I am certainly involved in one-the SEMTA Sector Skills Council, through its academy-that encourages young people to come off the unemployment register and works with SMEs to place those young people in businesses. There is a quid pro quo relationship in how that might be funded to give those young individuals a start in life. All the stuff that we hear about-the disruption that is often attributed to young people, and to which they contribute-really can be helped by individuals having a purpose. One of the things that I have found, as I am sure other noble Lords have, is that when you talk to young people who are on apprenticeships, they are absolutely delighted. When they come through them, they are even more thrilled. This is not about attracting a certain type of young person; it is about opening it up to everybody, because it is an opportunity. It is also an ambition for a lot of people. The country, as well as employers, needs these people,
	I want to make a couple of quick comments about the other amendments in this section and about the procurements issue in particular. My noble friend referred to our Government's intentions on this. Employers say to me and to people I work with, "You never see the Government doing this, yet we are being encouraged to do it". If you consider the relationship between the SMEs and prime businesses, you would consider those people to be part of the procurement process; they buy from them and prime companies demand that SMEs have apprentice-trained people inside their businesses to ensure the quality of the product that they are producing on their behalf. We need some matching up of words-I was going to say rhetoric, but that is probably too harsh, given the way the noble Baroness has come back to us-to ensure that we are talking the same language and, more importantly, that these people have that opportunity. It is the Government's policy to increase apprentices. We should be knocking at an open door when we have this discussion, rather than feeling that we are challenging them. I am delighted to be part of tabling this amendment.

Lord Layard: My Lords, I warmly welcome the government amendments that have been proposed, and I think the same goes for the noble Lords, Lord Wakeham, Lord Willis and Lord Sutherland, with whom I tabled a related amendment in Committee. Our aim was very simple; it was to ensure that there was a clear route to skill via an apprenticeship for young people who did not want to go down the academic route, and for this to become a well understood reality that the National Apprenticeship Service had a clear duty to make reasonable efforts to ensure that the provision was there for all who wanted to take advantage of it. That is what this amendment now proposes.
	I would have preferred a stronger duty on the National Apprenticeship Service, like the noble Lords who spoke earlier. However, I believe that this government amendment is a major step forward, and I pay a warm tribute to John Hayes, the Minister in the other place who is responsible for this, for his passionate commitment to apprenticeships and his vision in proposing this new clause. It is a major improvement in the Bill and it will be a major improvement in our whole educational system for 16 to 19 year-olds, although an even better one would be that proposed by my noble friends.

Lord Willis of Knaresborough: I support particularly Amendment 89ZZB in the name of my noble friend Lord Hill. I echo the comments of the noble Lord, Lord Layard, who has done a remarkable job in seeing this all the way through Committee and Report, and I compliment the Minister, and indeed his friend in the other place, John Hayes, for the way in which they have listened to the arguments. To have had an education Bill that did not actually mention apprenticeships was a mistake. It is always good when a sinner repents and comes forward with a confession. This is a confession that is worth noting. The Minister will go home happy tonight in that knowledge.
	The whole move back towards an apprenticeship service is something that the previous Government should rightly be proud of. It was supported on all sides of the House, but it was an initiative that was long overdue. The fact that this week we have seen such a dramatic rise in the number of apprenticeships, despite the fact that we have a severe downturn in the economy-I will not say recession-is something that again we should welcome very strongly indeed. Apprenticeships are very much here to stay. I am delighted to be going up to Newcastle on 22 November to open a new apprenticeship centre organised by Siemens, which is trying to work with other employers in the north-east. That is the next step.
	This is what this amendment is about: making best efforts. It is not good enough now just to say to employers, "The ball is in your court". We as a Government have to say, "How do we make sure that once the ball is played you participate in it?". Without employers, we do not have an apprenticeship system. I disagreed with the previous Government that the Secretary of State should have a duty on him or her to make sure that everybody who wanted an apprenticeship had one. You cannot do that unless you are going to force employers to take up the apprenticeship offer.
	There is a real issue, as the Minister knows, with unemployed 16 to 19 year-olds, who at this point are the largest group of unemployed people. The growth in this group is going to accelerate at the end of this year when we will get another cohort of young people going on to the dole queues. It is important that we do not then take the apprenticeship offer and downgrade it. It is important that an apprenticeship has real status in our schools and our colleges. You do not do that if you start to take a substandard group of youngsters who do not have the skills to access apprenticeships properly. I ask my noble friend to consider the ways in which our FE colleges can start to engage with those youngsters who cannot even get on an apprenticeship because they do not have the skills, to entice them back into our brilliant colleges and to give them the sorts of skills needed to embark on a career that will be satisfying and rewarding. This is exactly what this nation needs: a new cadre of young people who have the technical skills to support our businesses once they start to burgeon again.

Lord Elton: I am encouraged to rise briefly after what my noble friend has just said. Something has been worrying me since I was Minister for Education in Northern Ireland back in the 1980s: the difference in esteem granted to academic and non-academic choices of our children going to school. It was forced on me because we were the part of the United Kingdom that did not sign up to the end of the 11-plus, so there was a very stark contrast. My job was to try to get parity of esteem between the grammar schools and the secondary schools. I have noticed that vein going on through education after the end of the 11-plus: the great esteem given to an academic career, even after it was the only entry into a white collar job.
	It seems to me that the introduction and the success of the apprenticeship scheme is the answer to the problem that I was looking for 30 years ago. If we can give children, and in particular their parents and their parents' generation, the perception that it is as honourable and as rewarding to follow a practical career as an academic one, it will have a great effect on the way the young of the future see the choices before them. We will get a proper balance socially, academically and economically where it is needed. I am very glad to support my noble friend's amendment.

Baroness Verma: My Lords, I want to respond to the amendments tabled by the noble Lord, Lord Young, and of course to respond to other noble Lords. I thank very much all noble Lords who have welcomed the government amendment. The previous Government, and the noble Lord himself, did a great deal to make the apprenticeship programme what it is today and gave us a strong foundation on which to develop our skills flagship even further. I would like to take this moment to reassure the noble Lord that the Government understand and share his concern for young people's interests that lies behind his amendment. Indeed, our own amendment, discussed just now, underlines that point. However, the original offer to which the noble Lord refers would have meant that the chief executive of skills funding would have had to find jobs with employers for all the eligible young people who wanted an apprenticeship. While it is a noble aspiration, in reality the Government and their agencies simply cannot tell employers whom they should employ.
	The redefined offer in the Bill constitutes a more robust deal for the same young people because we know that we can deliver it. It sets the right balance between the employer-led nature of the programme and the need for support from government that young people can rely on.
	The noble Lord's other amendments propose making apprenticeships a condition of government contracting and Investors in People status, as well as requiring the Government to publish numbers and targets for public sector apprenticeships. I understand why the noble Lord has tabled the amendments and that he wants to ensure that government does everything in its power to encourage employers to take on apprentices, but a great deal is already being done to achieve this. I know that my honourable friend the Minister for Skills met the noble Lord, Lord Young, in September to explain this and has written to update him since. The Government believe fundamentally in a voluntary rather than regulatory approach. However, I know that the Minister has also reiterated to the noble Lord his determination to explore every opportunity to do more, provided that we do not put extra burdens on smaller employers and risk any breaching of the law. I would actively encourage the noble Lord to continue those conversations with my honourable friend the Minister for Skills or with me. My door is always open.
	The noble Lords, Lord Layard, Lord Willis and Lord Elton, spoke about clear vocational routes for young people. I absolutely agree. For far too long we have undermined the great skills that come through apprenticeships. We want to make sure that young people who have an aptitude towards these skills-usually a very good aptitude-get as much support as we can provide. That is why, from the £1.4 billion in funding that we have put in for 2011-12, £800 million has been directed towards 16 to 18 year-olds. We are absolutely committed to ensuring that we work with employers to give young people-who, as was mentioned, may not be able to go straight into an apprenticeship-access and a pathway to prepare them better. We would still see them as apprentices and ensure that within a maximum of six months they were ready to take on a fully fledged apprenticeship.
	The noble Lord, Lord Young, talked about the support for SMEs, GTAs and ATAs. Two-thirds of apprenticeship opportunities are offered by SMEs, which is why we want to make sure that we are supporting the SME sector by simplifying the systems and reducing the barriers so that SMEs are able to offer greater opportunities for apprenticeships.
	It has been a great success story. In fact, I was really pleased to hear noble Lords say that. There has been an increase in apprenticeships, which is of course what we want. We know that apprenticeships are a wonderful route into skilled employment. However, we must not see them as a panacea for unemployment. The scheme is there to train and fill a need that employers have. As the noble Lord knows, these apprenticeships are employer led; they are developed by employers because they are at the heart of knowing what they need. It would therefore be futile for us to impose upon employers restrictions and regulations that would bind them to artificial targets and barriers.
	We offer incentives to employers to recruit 16 to 18 year-olds. We know that it is crucial that we help them into employment, and the noble Lord is absolutely right to say that too many of them are unable to access it. That is why the Department for Education is fully funding its apprenticeships, and that is why we are there to support them absolutely. However, we must not forget apprenticeships for those who are older because they also need to be able to respond to the needs of the global economy as it changes. More than 100,000 employers offer apprenticeships. That is not enough and we want more to happen, but they are in 160,000 locations; two-thirds are offered by SMEs, which form 99 per cent of all businesses; and large businesses have the capacity to offer apprenticeships in larger numbers.
	There is much to be done, but we are doing and building on what has gone before. I hope that I have been able to satisfy the noble Lord because I really believe that he and the Government share the same wish: to ensure that our young people and older apprentices all get an opportunity to contribute fully to the life of this country and, in turn, to the global economy. The Government's amendments will further enhance the deal that we offer young people by prioritising funding for their apprenticeship training. I hope the noble Lord will feel encouraged that we want young people to start their careers on a sound and positive basis through apprenticeships-as, indeed, the noble Lord said. We differ only in our view on the most effective way to achieve that, but I am pretty certain that the noble Lord will feel sufficiently reassured to withdraw and not press his amendments.

Lord Young of Norwood Green: My Lords, I thank the Minister for her response and thank all those noble Lords who have participated in a profoundly important debate. The noble Baroness said in her first contribution that the government amendment strikes the right balance between aspiration and pragmatism. For my money, there is too much on pragmatism and not enough on aspiration. I do not quarrel with the direction but believe that the aspiration has to be stronger, and I shall develop that point.
	I rarely disagree with my noble friend Lord Layard, and I do not disagree with him on this matter because there is a large measure of agreement between us. Of course I welcome what the Government have done. I do not want to be the party pooper and say that the government amendment does not make any improvement -it does, but it is not enough. It ducks the issue in a couple of important areas.
	My noble friend Lady Wall talked about the record of many good employers, and that has been echoed through this debate. There are some brilliant employers. As you go around the country, you can find some wonderful schemes, but there are not enough. That is the real problem. You can muck around however you like with the statistics, but you are then faced with looking at the number of companies that take part-between some 4 per cent and 8 per cent, overall-and that is not exactly a staggering example. When only a third of FTSE 100 companies take part, we have a long way to go. Those are not my figures; I obtained them from Library research.
	My noble friend Lady Wall was right to say that we need to open up, and indeed we did open up, apprenticeships-

Baroness Verma: My Lords, perhaps I may reiterate to the noble Lord that we are in economic dire straits, but still we have seen an increase in apprenticeships. We are seeing a way forward with businesses by making sure that they are doing their bit in taking on apprentices. We are simplifying the system whereby employers can take on more apprentices. It is unfair of the noble Lord to say that we are not doing enough. Against the backdrop that we have, it is a very positive sign that employers are taking on apprentices. Of course there is more to do. We will carry on doing it. However, it is ungracious to say that employers are not taking on apprentices.

Lord Young of Norwood Green: I tried to be measured in my words and I do not think that I have been ungracious: I acknowledged the progress that has been made. I do not want to get too much into an argument about the current state of the economy, as we are going to disagree about how it is being handled. On the entitlement question, I changed the date from 2013 to 2015 as an acknowledgement of the difficulties. However, youth unemployment is in a crisis situation, and crisis situations call for crisis measures. That is the point that I am making and I am not going to resile from that. Therefore, I do not think that it is a question of me being ungracious. There is a real difference of approach and-

Lord Willis of Knaresborough: I was about to refer to the noble Lord as the honourable gentleman. He is an honourable gentleman. I do not think that anyone in the House would deny the passion and commitment that the noble Lord, Lord Young, has for this area of apprenticeships. That goes without saying. However, I have to ask him a key question. What strategy will he undertake to force-that is what he is talking about-employers to take on apprentices? What will he do?

Lord Young of Norwood Green: I was coming to the noble Lord's contribution and I was going to address that very word. I do not believe that you can force employers other than in one area. If, as an employer, you bid for a government contract, you have to indicate how many apprentices you are going to take on. That is what we said to those who bid for the Olympic contract and it is what we said in relation to Crossrail. I do not see any problem with that. Why on earth cannot the Government accept that commitment? If you want to do something positive that demonstrates the Government's commitment, that is it. If I have to use the word "force" in that circumstance, so be it, as I believe that that is an intrinsic part of it.
	The noble Lord, Lord Elton, made a very valid point. If we made a mistake as a previous Government, it was that at one point we emphasised the academic side so heavily that that somehow created the impression that the vocational or apprenticeship route was second class. It is not a second-class route; indeed, it is not an either/or choice, because many young apprentices go on to take degree courses as well. I have dealt on previous occasions with the question of ensuring that we give proper credence to the value of apprenticeships- I am conscious of the time.
	Once again, the noble Baroness, Lady Verma, talked about extra burdens on SMEs. Requiring people to take on apprentices does not impose a burden on them. It is the employers who do not take on apprentices who often live to regret it when they find themselves suffering from a skill shortage. I do not see apprenticeships as some kind of panacea for youth unemployment but I do see them as an essential prerequisite in helping to resolve the problem.
	I welcome the fact that the Government have made some progress but in our view it is not enough; more could be done. I make it clear that I shall wish to test the opinion of the House on Amendment 89ZZAA, which refers to procurement contracts, but, for the moment, I beg leave to withdraw Amendment 89ZZA.
	Amendment 89ZZA withdrawn.
	Amendment 89ZZAA
	 Moved by Lord Young of Norwood Green
	89ZZAA: Clause 67, page 53, line 26, at end insert-
	"( ) With the objective of achieving the apprenticeship offer for all qualified persons by 2015-
	(a) the Secretary of State will ensure that all government contracts require a clear commitment to apprenticeships; and
	(b) the Secretary of State will ensure that all government departments report regularly on the number of apprentices they employ and how many they intend to employ."

Lord Young of Norwood Green: My Lords, I wish to test the opinion of the House.

Division on Amendment 89ZZAA
	Contents 140; Not-Contents 175.
	Amendment 89ZZAA disagreed.

Amendment 89ZZAB not moved.
	Amendment 89ZZB
	 Moved by Lord Hill of Oareford
	89ZZB: After Clause 67, insert the following new Clause-
	"Securing the provision of apprenticeship training
	(1) Part 4 of ASCLA 2009 (the Chief Executive of Skills Funding) is amended as follows.
	(2) In section 85 (encouragement of training provision etc for persons within section 83)-
	(a) for subsection (1)(a) substitute-
	"(a) make reasonable efforts to secure that employers participate in the provision of apprenticeship training for all persons who are within section 83(1)(a) or (b) or section 83A(4), (5) or (6);";
	(b) in subsection (1)(b), for "training within the Chief Executive's remit" substitute "apprenticeship training";
	(c) in subsection (2), after "provision of" insert "apprenticeship";
	(d) in the heading, for "Encouragement of training provision etc for persons within section 83" substitute "Provision of apprenticeship training etc for persons within section 83 or 83A".
	(3) In section 118 (guidance by Secretary of State), after subsection (1) insert-
	"(1A) Guidance under this section must include guidance about the performance by the Chief Executive of the duty imposed by section 85(1)(a).""
	Amendment 89ZZB agreed.
	Schedule 18 : The apprenticeship offer: consequential amendments
	Amendment 89ZZC
	 Moved by Lord Hill of Oareford
	89ZZC: Schedule 18, page 130, line 22, leave out paragraph 7
	Amendment 89ZZC agreed.
	Amendment 89ZZD
	 Moved by Lord Hill of Oareford
	89ZZD: After Clause 71, insert the following new Clause-
	"Direct payments: persons with special educational needs or subject to learning difficulty assessment
	(1) In Chapter 2 of Part 9 of EA 1996 (ancillary functions of local authorities) after section 532 insert-
	"Direct payments
	532A Persons with special educational needs or subject to learning difficulty assessment
	(1) A local authority in England may make a payment (a "direct payment") for the purpose of securing the provision of any goods and services mentioned in subsection (2) to a person ("the beneficiary")-
	(a) for whom the authority maintain a statement of special educational needs under section 324, or
	(b) who is subject to learning difficulty assessment by the authority.
	This power is subject to subsection (3).
	(2) The goods and services referred to in subsection (1) are-
	(a) where the beneficiary is within subsection (1)(a), special educational provision specified in the statement of special educational needs;
	(b) where the beneficiary is within subsection (1)(b) and the authority have arranged for an assessment to be conducted under section 139A of the Learning and Skills Act 2000, provision identified in the assessment as required to meet the beneficiary's educational and training needs;
	(c) transport or anything else that may be the subject of arrangements under section 508B(1), 508F(1) or 509AA(7)(b) that apply in relation to the beneficiary.
	(3) A direct payment may be made only in accordance with a pilot scheme made under section 532B.
	532B Pilot schemes
	(1) The Secretary of State may by order make pilot schemes in accordance with which direct payments may be made under section 532A.
	(2) Subject to the following provisions of this section, a pilot scheme may include such provision as the Secretary of State thinks appropriate.
	(3) A pilot scheme must include provision about-
	(a) circumstances in which, and the descriptions of goods and services in respect of which, direct payments may (or may not) be made;
	(b) descriptions of persons to or in respect of whom direct payments may (or may not) be made;
	(c) conditions with which a local authority must comply before, after or at the time of making a direct payment;
	(d) conditions with which a person to or in respect of whom a direct payment is or may be made may be required by a local authority to comply before, after or at the time the payment is made;
	(e) the principles by reference to which the amount of a direct payment is to be calculated;
	(f) circumstances in which a local authority may or must stop making direct payments;
	(g) circumstances in which a local authority may or must require all or part of a direct payment to be repaid, by the person to whom the payment is made or otherwise;
	(h) the monitoring of the making of direct payments, of their use by the persons to whom they are made or of the goods and services they are used to secure;
	(i) the arrangements to be made by a local authority for providing persons to or in respect of whom direct payments are made with information, advice or support in connection with direct payments;
	(j) treating such support to any extent as goods or services in respect of which direct payments may be made.
	(4) The conditions referred to in subsection (3)(c)-
	(a) must include a requirement to obtain the written consent of the person to whom a direct payment is to be made before making the payment;
	(b) may include a requirement to obtain the written consent of one or more other persons before making a direct payment.
	(5) The circumstances referred to in subsection (3)(f) in which a local authority must stop making direct payments must include where the consent required by virtue of subsection (4)(a), or any consent required by virtue of subsection (4)(b), is withdrawn.
	(6) A pilot scheme must include provision for a sum required to be repaid to a local authority by virtue of the scheme to be recoverable as a debt due to the authority.
	(7) A pilot scheme may provide for paid-for goods and services to be treated as goods and services provided or arranged by a local authority in pursuance of a statutory duty specified in the scheme.
	(8) A pilot scheme may provide for paid-for goods and services to be treated in that way-
	(a) to the extent set out in the scheme, and
	(b) subject to any conditions set out in the scheme.
	(9) The only statutory duties that may be specified are-
	(a) section 324(5)(a)(i) (duty to arrange special educational provision specified in statement of special educational needs);
	(b) section 508B(1) (duty to make travel arrangements for eligible children);
	(c) section 508F(1) (duty to make arrangements for provision of transport etc for adult learners);
	(d) section 509AA(7)(b) (duty to make, and secure that effect is given to, arrangements for provision of transport etc for persons of sixth form age).
	(10) "Paid-for goods and services" are goods and services acquired by means of a direct payment.
	532C Pilot schemes: local authorities and duration
	(1) An order under section 532B(1) making a pilot scheme must specify-
	(a) the local authorities in respect of which the scheme operates, and
	(b) the period for which the scheme has effect.
	(2) The period specified under subsection (1)(b) must not exceed two years, subject to subsection (3).
	(3) An order under section 532B(1) may extend the period for which a pilot scheme has effect, subject to subsection (4).
	(4) The period for which a pilot scheme has effect may not be extended so as to end after the end of the relevant four year period.
	(5) "The relevant four year period" is the period of four years beginning with the day on which the Education Act 2011 is passed."
	(2) In section 568 of EA 1996 (orders)-
	(a) in subsection (3), after "other than" insert "an order to which subsection (3A) applies or";
	(b) after subsection (3) insert-
	"(3A) This subsection applies to an order under section 532B(1) (direct payments: pilot schemes), apart from the first order to be made under that subsection.
	(3B) A statutory instrument which contains (alone or with other provision) an order to which subsection (3A) applies may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament."
	(3) The provisions inserted into EA 1996 by subsections (1) and (2) are repealed at the end of four years beginning with the day on which this Act is passed."

Lord Hill of Oareford: I start by setting out the context for this new clause. Our SEN and disability Green Paper set out the biggest programme of reform in education, social care and health support for disabled children and those with special educational needs in the past 30 years. Our proposals respond to the frustrations that children, young people and their families have with the current system and seek to give parents more control over the support that their family receives.
	We said in the Green Paper that we would give every child with a statement of SEN or a new education health and care plan, and their family, the option of a personal budget by 2014. The evidence shows that a personal budget can give families more flexibility and empower them to make decisions about the support they receive. Families that took part in the individual budget pilot, which began under the previous Government, said that they feel they have more choice and control over the support they receive and better access to and greater satisfaction with services. We want to give more families access to personal budgets because of the evidence of the benefits that can bring. One element of a personal budget can be a direct payment to a parent or carer to buy a service or piece of equipment for their child. In those individual budget pilots, nearly two-thirds of families opted to have a direct payment as part of their personal budget.
	I am grateful to the noble Lords, Lord Rix, Lord Low and Lord Touhig, and a number of external organisations, including the Special Educational Consortium for the work that they have done with us since the original draft clause and scheme was circulated in September. Their contributions have helped us to improve our plans for the pilots and we look forward to continuing to work with them. I also thank them for the work they have done with us on improving the system for complaints about schools. I have said that we will not commence Clause 44 of the Bill until we are confident that the department systems are right, and I look forward to working with them on that.
	This new clause and the associated scheme would allow local authorities in our Green Paper pathfinders and the individual budget pilots to test the use of direct payments in education for children with SEN. I should stress that we are only proposing a power to pilot the use of direct payments. We can see benefits for children and families but we need robust evidence from the pilots of what works and how to avoid potential problems. The new clause is broadly based on the legislation that allows the use of direct payments for health, including many of the safeguards that this House secured during the passage of that legislation. I apologise to the House for the lateness of the amendment to the new clause, laid by the Government yesterday, which makes the first order setting out the detail of how the pilot will operate subject to an affirmative resolution. That relates to concerns raised by the noble Lord, Lord Touhig, and the Delegated Powers and Regulatory Reform Committee which recommended that this is an appropriate level of parliamentary scrutiny. I accept that view and hope that we will be able to secure time for that debate as early as possible to allow maximum time for the pathfinders to test direct payments.
	There are also a number of safeguards contained in the scheme which sets out how the pilots must operate to ensure that children, families, and local authorities taking part in the pilot are protected. First, the pilots will be entirely voluntary for children, young people and families. The local authority must obtain written consent before making a direct payment, and this consent can be withdrawn at any time, in which case the authority must make other arrangements to make the provision. The making of a direct payment does not waive, suspend or repeal any existing statutory duties. Linked to this point, I would like to make it clear that all of the work of the pathfinders will take place within the current statutory framework.
	The pathfinders will be required through the scheme to provide appropriate and effective information, advice and support to prospective recipients of direct payments. We have learnt from individual budget pilots that where this is done well, personal budgets and direct payments can be accessible to families from all backgrounds. The local authority will be required to monitor and review the use of the direct payments, and this will be in addition to their existing statutory duty to conduct an annual review of statements.
	The purpose of the pilot is to gather information about what works in practice, so it will be evaluated as a distinct element of the wider evaluation of the SEN Green Paper pathfinders. The evaluation will capture information about the impact and effectiveness of direct payments, including cost-effectiveness; the processes local authorities establish to agree, quantify and cost the services to be delivered by direct payment; and potential barriers to delivery. We will ensure that it captures information on age, impairment, and type of need, as well as take-up by different socioeconomic groups. The pathfinder authorities will benefit from the expertise of the pathfinder support team, and they will work closely with the evaluators to provide support and specialist advice, and will help share any emerging learning, including that coming from the evaluation.
	I hope that noble Lords will agree with me that direct payments for educational provision have the potential to improve the quality and the choice of support available to children with SEN and their families. There are, however, important and sensitive issues to address and it is right that we should test how we can make this approach work. That is what these pilots will enable us to do, and that is what this clause sets out to achieve. I beg to move.
	Amendment 89ZZDAA (to Amendment 89ZZD)
	 Moved by Lord Hill of Oareford
	89ZZDAA: After Clause 71, Line 118, leave out from beginning to "may" in line 122 and insert-
	"(3A) A statutory instrument which contains (alone or with other provision) an order under section 532B(1) (direct payments: pilot schemes)"

Lord Touhig: My Lords, by introducing these new clauses into the Bill the Government will allow local councils to test the use of direct payments for meeting special educational needs. I certainly welcome and support the greater personalisation of educational provision for young people as does the noble Lord, Lord Low, and the noble Lord, Lord Rix, who I know had some very fruitful and useful meetings with the Minister and his officials. Both noble Lords wished to be here this evening, but are unavoidably unable to be with us; they have asked me to mention to the Minister how much they appreciate the courtesy and the assistance he and his officials have given.
	Direct payments have played an important role in allowing disabled people to have choice and control over the services they receive. Nevertheless, there are some significant risks in the use of direct payments in education, particularly in schools. The Department for Education has been working closely with the Special Education Consortium to mitigate these risks, and I know that the Special Education Consortium has certainly welcomed that collaboration and consideration. The matters they are still concerned about include ensuring that the pilot schemes must be set up by an order by the Secretary of State. Establishing the details of the pilot scheme within the legislative framework is a necessary safeguard if these significant changes to the way education is delivered are to be properly scrutinised by Parliament.
	The order which establishes the pilots was originally to be the subject of a negative resolution. The noble Lord, Lord Low, and I tabled amendments to ensure these important changes were properly debated through an affirmative resolution procedure. We have withdrawn these amendments because the government amendment means the pilot schemes will be subject to the affirmative resolution procedure as the Minister told us this evening. This is very welcome, and we are grateful to the Government, particularly as the initial amendment on direct payments in education was tabled at such a late stage, as the noble Lord has explained.
	The noble Lord, Lord Low, and I also tabled further amendments concerning the details of the scheme. However, as the order will now be subject to the affirmative resolution procedure, we believe these concerns might be more usefully spelt out and discussed in detail during that debate. These two have been withdrawn. Nevertheless, we would still like to put on record some of the issues we hope will be addressed by the order.
	We need to know how to measure the reaction of education providers to individuals holding direct payments for special educational provision. This may interact with school and college finances and employment policies, and will affect the ability of schools to plan for all children with special educational needs. Perhaps the Minister will say what steps will be taken to ensure that the viability of specialist SEN services is not threatened where direct payments are taking money out of the system. We also need to know how decisions about the amount of direct payments will be made, particularly if statements are poorly written-there are examples of that as I am sure we all know-and how parents can appeal those poorly written statements. Finally, we need to know whether there will be a thorough evaluation of direct payments in education in particular before Parliament is asked to renew the order in two years' time.
	The noble Lords, Lord Low and Lord Rix, and I welcome the Government's new position, but we urge the Minister to make debating this order a priority in the parliamentary timetable so that these proposals, which are rightly being tested, can be given the fullest opportunity to show their worth. Great progress has been made, and I have been asked by my colleagues-who are not able to be with us this evening-to say to the Minister in particular how much they and I and especially the Special Education Consortium have appreciated the fact that he has genuinely worked with us to try to resolve our concerns. This seems to be a better way to make law.

Lord Lingfield: My Lords, I particularly welcome this new clause because one of the most important items in it allows a continuation of funding post-16 and 18 to the age of 25. Many parents are dismayed that their "special education offspring"-as one put it to me-fall off the end of a funding cliff when they reach early adulthood, and this pilot will help us see much more accurately how this can be done. I hope, however, with the noble Lord, Lord Touhig, that the Government will set out very clearly how these experiments are to be monitored, so that best practice may be observed and reported. It is also important for the Government to make clear to parents what they should do if they want to challenge the amount of payments, and contend that the health or social service elements are too little. My view is that the clauses are necessarily restrictive, in that as I understand it parents frequently agree part-funding with local authorities, but are not to be allowed to supplement the amount of the direct payment to purchase the provision set out in a beneficiary statement. Perhaps the Minister would look at this again. However, I welcome this step in the right direction-albeit it is a small, pilot step-to alleviate the great problems that there are in the special needs sector. I look forward eventually to seeing the careful evaluation when it is published.

Baroness Sharp of Guildford: My Lords, like other noble Lords, I very much welcome these pilots and I am very grateful to the Minister for having listened to the Special Educational Consortium and others who have been talking to him about this.
	I have been asked by the Association of National Specialist Colleges to raise two issues which possibly have already been covered by the discussions that have been held, but as I have not be party to those discussions I would like to raise them and seek assurances from the Minister. First, in the original draft of the pilot scheme there was a suggestion that colleges could be asked to return an element of the funding to local authorities in order for them to make a direct payment to the students who were already attending the colleges. The Association of National Specialist Colleges felt that this was overly bureaucratic and was a somewhat artificial approach to the pilots. The suggestion does not appear now in the published information, but it would be helpful to know whether it has been dropped or whether it is likely to be retained in additional guidance as the pilots proceed.
	The second issue was one of transport, which has always been a major issue for those with special educational needs because local authorities are supposed to provide the funding for such transport and very often they have been derelict in their duties. A direct payment allows for students to pay for transport. The Association of National Specialist Colleges has significant concerns about the lack of transport funding for young people with learning difficulties or disabilities to get to both specialist and mainstream colleges. Unless there is a transport budget available for local authorities to include within the direct payment, it was concerned that the ability of students to pay for transport, as well as other requirements, would be impaired. They wondered, therefore, whether there was any way of ensuring that the local authorities had included an allowance for transport in the direct payment before there was any expectation that the students would be paying for that transport. Perhaps the Minister could clarify those two points so that they are on the record.

Baroness Jones of Whitchurch: My Lords, like many noble Lords in the Chamber, we welcome the direct payments initiative. It is right that it should be piloted and closely scrutinised. We will play our part in that. I hope that the Minister is able to reassure us that the outcome of the pilots will be fully debated by your Lordships' House in due course. I suspect that we will find that, as with many initiatives, it is the detail that matters and how the new powers are interpreted by parents and local authorities alike. We need clear advice and updates on how the pilots are working in practice. The outcome has to be an improvement in the provision of SEN services in schools and the pilots will need to demonstrate that all SEN children, not just those of middle-class parents, have an improved quality of service.
	Noble Lords have raised a number of important questions in the short debate, but there remain some concerns that I hope the Minister will be able to help me with. Like the noble Baroness, Lady Sharp, I say that these points may have been covered in the discussions, but forgive me if I am not up to speed on some of the discussions that have taken place. First, how can we be assured that the payments will be enough to cover identified need so that the parents will not be expected to make up the difference from their own budgets? Secondly, how will other families be assured that other budgets will not be cut to fund these payments, thereby adversely affecting other services provided by the local authorities? Thirdly, how will the special position of looked-after children be protected? For example, foster carers will potentially administer the payments but might be perceived to have a conflict of interest, as they are also employees of the local authority. Lastly, on the level of support and advocacy provided to parents, which the Minister touched on, can he reassure us that that will be independent of local authorities because undoubtedly parents will find the system new, potentially difficult and overwhelming in terms of the choice and the bureaucracy with which they are faced? Perhaps he could clarify the level of independence that would be available.
	A separate, procedural point is that we find ourselves, once again, tonight making policy on important issues on the hoof. These issues would have benefited from a longer period of consultation, both within the House and outside. The legislation, as drafted, has been placed in completely the wrong part of the Bill; it is in Part 7, which deals with post-16 education and I do not suppose that the Minister is suggesting that these payments are restricted to post-16. The Government should do better than this and, if they do not, they cannot complain when humble Back-Benchers follow their example and try to misuse the structure of Bills to put bits of legislation in the wrong place.
	Notwithstanding all that, we support the intent of the Government's proposals and we look forward to the future scrutiny which, we trust, will occur in due course.

Lord Hill of Oareford: My Lords, I am grateful for the broad welcome from all sides of the House for what we are attempting to achieve with these pilots and for what we are trying to do to get a better system for the most vulnerable children in the country from all backgrounds. As a number of noble Lords have made clear in their questions, there are a number of important issues to get right and that is the point of the pilots. We shall work through some of the issues that have been raised as a result of the pilots.
	The noble Lord, Lord Touhig, and the noble Baroness, Lady Jones of Whitchurch, raised the issue of evaluation. There will certainly need to be very careful evaluation. We would want to share that with noble Lords. I was very grateful for the remarks made by the noble Lord, Lord Touhig, about the way in which we have managed to work with him, others and the Special Educational Consortium and I want that to carry on. The first evaluation results will probably arrive next April and there will be another report next September, but we want this to be an open process. I am very happy to share the findings as we go along and to work on ensuring that everything works as we want it to. As I said before, I think we are all agreed on the direction in which we want to go but, of necessity, difficult questions arise, some of which have been posed, about funding. The only way to answer those questions is to work through them with an open mind, and not to prejudge the outcome but to try to come up with solutions to them.
	My noble friend Lady Sharp asked a couple of questions, first, on behalf of Natspec, in relation to the element of funding to local authorities. During the pilots, a local authority and a college will need to agree before a direct payment can be made. We think it is right to do everything possible to give students greater control over the services that they receive, so we are testing direct payments through these pilots to ensure that we learn everything about how to make them work in practice.
	On transport, the pilots of direct payments will not affect current local authority duties or budgets, including those for transport, so if a local authority were to agree a direct payment for transport with a student, it would need to agree what the payment was for and exactly how much it would cost. My noble friend Lord Lingfield asked about top-ups: will parents be required to top up? The noble Baroness, Lady Jones, was concerned about that too. In no circumstances should the amount of the direct payment be set at a level that would require someone to pay from their own resources in order to secure part or all of the provisions set out in the child's statement of SEN or the young person's LDA. If an individual wishes to purchase support that is additional to that needed to meet the assessed needs, it would be open to them to do so.
	That links in to the question put by the noble Lord, Lord Touhig, about what is in the statement, as the statement determines what is delivered, how much things cost and so on. We know that local authorities are currently required to specify the provisions necessary to meet the needs of a child in the statement, but we also know that the quality of statements and learning difficulty assessments varies significantly. We think that the process of establishing a direct payment should, by itself, help in this regard because in order to make a payment to a family, the local authority would have to quantify exactly what provision is required. Our experience with the individual budget pilot supports this view, and parents report the initial discussions to establish a budget as one of the significant benefits of the overall pilot. I think that will help address that concern. So far as the question about the independence of the support is concerned, I will follow it up and write to the noble Baroness with more particulars on it.
	I am grateful to noble Lords for the support for this. I hope it will mark a significant step forward. We hope these pilots will work.
	Amendment 89ZZDAA (to Amendment 89ZZD) agreed.
	Amendment 89ZZD (as amended) agreed.
	Amendments 89ZZDA and 89ZZDB had been withdrawn from the Marshalled List.
	Clause 72 : Student loans: interest rates
	Amendment 89ZZE
	 Moved by Lord Stevenson of Balmacara
	89ZZE: Clause 72, page 56, line 16 at end insert "or
	( ) for the period until the first repayment is made, not in excess of the average cost of borrowing borne by the Government in the preceding financial year."

Lord Stevenson of Balmacara: My Lords, Clause 72 amends the powers given to the Secretary of State in the Teaching and Higher Education Act 1998 to make regulations setting interest rates for student loans. As the legislation currently stands, Section 22 of the 1998 Act effectively provides that the interest rates set must be no higher than the rate required to maintain the value of the loan in real terms. If no repayments are made, the size of the loan increases in cash terms but remains fixed in value terms. Clause 72 gives the Secretary of State wide and substantial powers to set interest rates, but its intention is to move the policy of the Government away from where it currently is, and from where its independent adviser, the noble Lord, Lord Browne of Madingley, recommended it should stay. It will move us from the position of a zero rate of real interest to one in which the real interest rate would be 3 per cent above RPI.
	We had a bit of a stushie in Committee about who said what and when about how many graduates are not expected to repay their loans in the future, which is an important issue as it has consequences for the taxpayer. According to the letter I received subsequently from the Minister, I did not misquote senior members of the Government on this issue. However, she went on to explain that the department,
	"currently estimate that around 40% of full-time students could have some of their debt written off".
	She goes on, however, that this,
	"remains an uncertain estimate and if OBR projections of inflation and earnings growth change this autumn, then the figure could change again. In December last year the IFS"-
	a widely respected think tank-
	"estimated that the proportion could be around 50 per cent and we accept that the true figure could range from 40 per cent to 50 per cent".
	So there we have it. Whether it is 40 per cent or 50 per cent or somewhere in between-my fear is that it will be on the higher side-it is a very large sum of money indeed to carry within the national accounts.
	There are still issues on which we have not had an answer. The Browne report recommended that the interest rate should be set at the rate that the Government themselves can borrow money. What therefore is the justification for the figure of 3 per cent? Why RPI was selected, not CPI? Is the 3 per cent above the RPI rate of interest Sharia compliant? What assessment has the department made of the 10 per cent drop in student applications for 2012, and does it think that the drop is linked in any way to the high fees being charged?
	I have discussed this issue with the Minister since my original amendment was discussed in Committee, and I am grateful to her for giving me time to go over my concerns. However, I feel very strongly that using RPI instead of CPI is wrong, and taking powers to impose rates of up to 3 percentage points above the RPI is penalising our young people and their families. It will exacerbate social divisions, and it may deter young Muslim applicants. It will generate a high level of individual debt, which will have to be repaid over a period of, say, 25 or 30 years, and is set in the form of a contingent tax liability. A positive real rate of interest will impact in particular on mature students. It is likely to have an adverse impact on female graduates and on men in the bottom decile of earnings. It is setting students off on a lifelong debt habit, and approximately half the loans are going to be written off. I still do not really understand how a policy can be supported when it is basically a tontine of very crude proportions: half those affected by it get their loan commuted to a grant, which then becomes a deadweight charge on the PSBR, simply because they earn too little to trigger any repayments and because they happen to live longer than 30 years after the due repayment date.
	However, I recognise the pressures on the system and the need to recoup some of the costs. So I offer a late Halloween deal to the Minister: why not have one rate of interest for the period when young people are studying and a different one when they are earning enough to begin repaying what they have borrowed? The change in rate from constant value to a real rate of interest could be tied to the point at which they begin repaying. This is what is set out in my amendment. I hope this version of trick or treat is an attractive proposal for the Government, and I would be grateful if, in the event they cannot accept it tonight, they take it seriously and agree to have further discussions with me about it before Third Reading. I beg to move.

Baroness Verma: My Lords, the amendment moved by the noble Lord, Lord Stevenson, seeks to place a statutory requirement in the Bill whereby the interest rate at which borrowers are charged while they are studying and until their first repayment is no more than the government rate of borrowing for the preceding financial year. I thank the noble Lord for raising this issue, and I hope that he will find my response helpful. I will not put it in the context of trick or treat.
	The current system provides borrowers who go on to earn the highest incomes with an interest subsidy while they are studying. This amendment is unnecessary because high-earning graduates are well placed to contribute to the cost of their higher education, and it also makes it unprogressive. The new arrangements that we are proposing mean that, in practice, the only people who are affected by the decision to charge a real interest rate while studying are those high-earning borrowers who pay back their loans in full. Those who do not fully pay back their loans will see that part of their borrowing written off. What is more, charging a real rate of interest is part of a progressive package of reforms, and any proposal to change this rate of interest should be considered in the round.
	The changes that the noble Lord is suggesting would have a significant cost and impact on the sustainability of the new student finance package. Our analysis shows that charging students the government rate for borrowing-currently, RPI plus 2.2 percentage points-means that we would have to find a further £100 million per year. If we were to reduce this further, as has been suggested, to an interest rate of RPI only, while studying, or if we were to extend this rate until the student makes their first repayment, it would mean the costs would be even greater. The Government are committed to the progressive nature of the repayment system and want to ensure that those who earn most and can afford it contribute most towards the cost of their education. I am sure that the noble Lord does not disagree with that.
	The noble Lord spoke about women being affected disproportionately. We estimate that around 35 per cent of female graduates will repay less than those on the current system. This is in large part because since women are more likely to be lower earners, they are more likely than men to benefit from the features of the progressive repayment system, including the protection afforded by the higher repayment threshold.
	We do not want to have a negative impact on disadvantaged groups, and that is why the Government are committed to ensuring that our universities remain open to everyone with the ability to succeed in higher education. Our equality impact analysis indicates that our student funding reforms will not have a negative impact on protected groups. With our new repayment terms, we estimate that around a quarter of graduates- those on the lowest incomes-will pay less than they do on the current system.
	The noble Lord asked about Sharia-compliant loans. We are actively investigating the possibility of introducing an alternative finance system and are working with organisations such as the Federation of Student Islamic Societies and the National Union of Students. We are clear that we want a single student loan system that can meet the needs of the majority of students, where possible. We will seriously consider proposals to change the administration or presentation of the system in ways that can address the doubts that members of some faiths might have about accessing student finance. However, any proposals would need to ensure that the overall financial outcomes for government are the same and that all student loan borrowers are treated the same in accordance with existing legislation. It is important to get this right, and I know the noble Lord agrees with me that it may take a little longer, but the outcome must be absolutely right.
	The noble Lord raised the RPI/CPI question. No single measure of inflation is appropriate for all purposes. It is important to view the package of reforms in the round. We need a student finance system that is progressive, sustainable and affordable for the taxpayer, and that is what we have delivered. A measure of inflation that brought in lower contributions from the highest earning graduates would require us to be less generous with the progressive elements of the system that protect our low earners.
	The Government's student finance package is progressive and sustainable. It rebalances investment in higher education so that there is less public subsidy and a greater contribution from those who benefit the most. This can only be right. Our proposals create a system that provides more generous support for students from lower-income households and protects low-earning graduates. We believe that this is a fair deal. For those reasons, I cannot accept this proposal but I am very happy to continue meeting the noble Lord to discuss his concerns further.

Lord Stevenson of Balmacara: My Lords, I thank the Minister very much for that and in particular for her closing remarks about continuing the discussions. I think it would be worth having a further round of that. I gather there is a date now in the diary and perhaps we can pick it up at that point.
	I would like to make three small points, and one at the end. First, it was good to hear that the difference in the cost to the public sector of going from 2.2 per cent to 3 per cent was only £100 million a year. I say "only" in a casual, flippant way-of course it is a lot of money, I understand that, but it is not a lot. If one has to balance the impact and the damage done because of the increase, I think that is worth bearing in mind. I am grateful to have that information and I will think about it.
	Secondly, the Minister said that the proposed changes will not have an adverse impact on admissions, but I think I am right in saying that the reduction in admissions reported last week was highest among mature students and women. That is a worrying sign. It may not be reflected when the full admissions figures come in, but even at this early stage of admissions, which is primarily for medicine, veterinary science and Oxbridge, those reductions are worrying and we need to bear them in mind.
	Thirdly, on the point of whether or not the loans as currently proposed are Sharia compliant, I am grateful to the Minister for saying what she did on that. This is something that we perhaps could do by correspondence because we share a common wish that this works out well and that there is not an artificial or even a real division between the systems of loan that are appropriate across the whole country.
	Finally, although it is fantastic that both full-time and part-time students who go on to higher education will be able to do so free at the point at which they enter the system, there is a price to pay for that. Underneath all the rhetoric, the truth is that this is a progressive system only because out of it will come a very large number of people-perhaps 50 per cent of the cohort-who do not earn enough to go on to a statutory repayment basis. It is a sort of race to the bottom and a crude way of depressing wages, and that cannot be right. There must be a better way of getting this across. If the progressive nature of this is really a way of separating out those who are benefiting from higher education and get more than the average wage in the country from those who do not, the phrase that is being used-those who earn more should contribute the most-begins to sound more like a graduate tax than anything else. Having said that, I hear what has been said tonight and I beg leave to withdraw the amendment.
	Amendment 89ZZE withdrawn.
	Amendment 89ZA
	 Moved by Baroness Brinton
	89ZA: After Clause 73, insert the following new Clause-
	"Repayment of loans for part-time students
	No part-time student shall be required to repay their loan until-
	(a) they have completed their studies, or
	(b) four years and six months has passed since the start of their course, whichever occurs first."

Baroness Brinton: I rise to speak to Amendment 89ZA in my name. I thank the Minister for her letter of 25 October, in which she reports that the Minister for Universities and Science has agreed to accept that the statutory repayment date for all those studying part-time will be the April that falls four years after the start of their course. This seemingly small decision will have a very large impact on part-time students across the country, and I am absolutely delighted with the news.
	The Open University has said it will make a significant difference to many of its over 200,000 students, and Birkbeck College has written to me to say that this is also very important for its non-traditional students, who are often juggling their study with work, mortgages and family commitments. I am also concerned that we need to ensure that the budget for widening participation, which the Government have provided this year and is being distributed by HEFCE, continues because these non-traditional students must get the right support to enable them to access the university courses that they need. I hope that the Government will ensure that the current HEFCE widening participation grant will continue beyond 2012.
	I also thank the Minister for arranging a meeting with the Minister for Universities and Science later this week. I wish to raise with him the points I covered in Grand Committee, which also relate to the issue of part-time students repaying their loans. First, I am hoping for confirmation that the arrangements for part-time higher education students on fee loan repayments will also apply to the other new group of students now able to access loans to cover fees-that is, adult students over 25 studying a level 3 qualification, including but not only access to HE. That would, after all, be only fair and equitable.
	Secondly, in Grand Committee I mentioned a letter from the Minister for Universities and Science to million+ at the beginning of September regarding the proposed government fee caps for part-time students, which may well leave universities and part-time students with an inadvertent problem. The impact assessment for the Education Bill says:
	"The Bill also proposes to give the Secretary of State the power to specify in regulations the maximum tuition fee that higher education institutions (HEIs) may charge part-time undergraduate students in a given year. The level of the cap will be set through regulations, and the Impact Assessment will be published at that stage.
	The current proposals for the cap, taken in isolation, will have no significant costs and benefits that can be monetised. This is because our analysis suggests that part-time course tuition charges do not currently exceed the maximum amounts proposed for the cap. The upper fee amount will be £6,750. The lower fee amount will be £4,500".
	This means that for part-time students there are proposed fee caps of £6,750 and £4,500, which relate to 75 per cent of a £9,000 full-time fee and 75 per cent of a £6,000 full-time fee respectively. This proposal assumes that part-time students do not study at more than 75 per cent intensity and that universities would be seeking to raise part-time fees excessively if the cap was higher than that proposed by BIS. This fundamentally misunderstands how part-time students study. In practice there is inevitably a good deal of flexibility in relation to the intensity of study, which may vary according to circumstance, such as work, family commitments and the number of modules that students have been able to study in previous years.
	Part-time and full-time study are both based on modules and credits rather than percentage intensity. There are 120 credits in an academic year and it would be much more helpful for students if universities were able to charge these part-time fees on a pro rata basis linked to credits undertaken and the full-time fee set by the university for the course in question, with an eligibility floor of 25 per cent intensity. This would provide more flexibility for students and would be no more costly overall in respect of fee loans, especially since part-time students will not be eligible for maintenance loans or grants.
	Pro rata charging would also ensure that there was equity of funding between full-time and part-time modes as well as transparency of costing. The most transparent costing methodology is credit based, but this will not work if students and universities are limited in how they deliver their courses. As well as being difficult for universities to administer, this arbitrary cap of 75 per cent could well have many perverse consequences. These could include students on the same courses and studying at the same intensity being charged different prices as a result of studying at different intensities in previous years. It could mean that students end up paying less or more than 100 per cent of their degree cost.
	I am quite sure that the Government never planned for this law of unintended consequences to prevail, and I am looking forward to discussing this with the Minister and the Minister for Universities and Science later this week. I hope that we will be able to have a letter on this complex issue before Third Reading.
	To end on a high note, and to make it absolutely clear to the Labour Opposition, who seem to have taken delight in mischievously not noticing when the Government have given significant ground on issues, I thank the Government for changing the fee loan repayment arrangements for part-time students, so that now they match the arrangements for full-time students. Our universities will now have a clear message that part-time higher education will be free at the point of study for the vast majority of students. I beg to move.

Lord Stevenson of Balmacara: My Lords, I shall also speak to Amendment 89ZA in the names of the noble Baronesses, Lady Brinton and Lady Sharp of Guildford, and myself. We are of course delighted that the Government have accepted that the statutory payment due date for all those studying part-time will be the April which falls four years after the start of their course. A potential injustice has been avoided and the change represents a step towards breaking down the barriers to part-time study.
	Once this Bill becomes law, the situation seems to be that part-time fees are set to go up from about £1,000 per annum, which is the latest DES figure, to £6,750. Part-time students will not be eligible for maintenance loans or grants as they are at present but such students will have to borrow to pay the much higher fees that are going to be charged. I worry about this radical change to the current position and whether the existing range of part-time students, who are mainly mature, female and people who say that they missed out the first time around, will continue to enrol on part-time courses.
	I have some questions to leave with the Minister. Why are the Government regulating part-time fees when the existing system seems to be working? If a university is setting a fee which it thinks the market will bear and the Government are prepared to extend its voucher system to part-time students, why put in an inducement to raise that fee, which will be hard to resist, to £6,750? Why not try it for a year or two and, if necessary, regulate at that point if it is not working?
	As has already been said, not all university part-time course structures fit neatly across four years and not all students wish to study at the same level of intensity each year. It must be to the student's advantage to study at the pace that best suits their lifestyle and commitments. Universities have reacted to that by becoming more flexible in terms of evening and weekend study, and study outside the traditional academic year.
	Given that, I have some sympathy with the case that has been made by million+ that it would be much more helpful for students if universities were able to charge part-time fees on a pro rata basis linked to the credits undertaken and the full-time fees set by the university for the course in question.
	HEFCE currently provides £368 million to institutions to support them with the additional costs of attracting and retaining students from the most deprived areas and those in receipt of disabled student allowances. The early years allocation from this fund has led it to attract 20 per cent of its newest students from the 25 per cent most disadvantaged communities in the country, 12,000 current students with registered disabilities and 18,000 students who access higher education through targeted access, taster and opening programmes. When the Minister replies, perhaps she will reassure us that the earmarked funding of this nature will continue. I look forward to hearing the answer to these questions.

Baroness Verma: My Lords, first, I thank my noble friend and the noble Lord for their warm welcome to the Government's response. The amendment in the names of my noble friends Lady Brinton and Lady Sharp, and the noble Lord, Lord Stevenson, seeks to extend the repayment due date. I also thank them for championing this point and apologise for the delay in arranging a meeting with my right honourable friend the Minister for Universities and Science and myself. As noble Lords know, I take pride in delivering on my commitments and I am sorry that there has been this delay.
	My right honourable friend has listened carefully to the debate in this House. He has considered all the arguments and has asked his officials to have those further discussions. While we are not able to accept the amendment as it was laid, I am pleased to confirm that through secondary legislation we will set the repayment due date for part-time students as the April which falls four years after the start of their course or the April after a student leaves their course if that is sooner. A letter has been laid in the House Library to this effect, and I am pleased to note that this change has been resoundingly welcomed by the sector.
	My noble friend Lady Brinton asked about widening participation. To ensure a fair deal for poorer students, we have announced a new £150 million national scholarship programme to support students from disadvantaged backgrounds. I will write to my noble friend on HEFCE's widening participation funding. I also hope that she and the noble Lord will take the opportunity later this week to discuss this and all other issues raised by noble Lords today with my right honourable friend.
	My noble friend and the noble Lord asked about regulation. My noble friend proposes a more rigid system of regulation than that put forward by the Government. We do not believe that there is evidence that such a system is needed. Our proposals establish a common framework within which higher education institutions have flexibility to set their own pricing. They need to be sensitive to the level of pricing that potential students will bear. Part-time students may simply not accept charging over and above the relevant proportion for their full-time equivalent. Our proposals protect students by ensuring that their loan will cover the full amount charged and by securing investment in widening participation and fair access. We will of course carefully monitor the new system and, if we need to, we will review and revisit it.
	The noble Lord, Lord Stevenson, asked about the regulatory burden. This cap will enable higher education providers to set their own charges as they do now but up to a maximum amount specified in regulations. We do not believe that this will cause an unnecessary regulatory or administrative burden. Our proposals establish a common framework.
	I look forward to further discussions with the noble Lord, Lord Stevenson, and my noble friends Lady Brinton and Lady Sharp. This week, my right honourable friend will speak to them and I hope that we will have some fruitful discussions. Therefore, I hope that my noble friend will withdraw her amendment.

Baroness Brinton: I thank the Minister for her response and the noble Lord, Lord Stevenson, for his contribution. There is much agreement about the principle of the repayment of fee loans for part-time students. The other issues raised are complex and they sit beneath the primary legislation. I am grateful for the meeting to be held later this week and I am pleased that the Minister thinks that we can have fruitful discussions.
	The only point that I would make is that neither myself nor the noble Lord, Lord Stevenson, think that we are proposing a tighter regulation base. In fact, the present system will constrain universities and students because it is rigid and, as I said earlier, may provide a law of unintended consequences where some students may bizarrely end up paying more than the cost of their course because of this structure of breakdown. Those are the discussions that I hope we are aiming for.
	As I said at the end of my speech when introducing this amendment, I want to end on a positive note. I thank the Minister and the Government for agreeing to the principle of this amendment. I look forward to the revised legislation coming through and I beg leave to withdraw the amendment.
	Amendment 89ZA withdrawn.
	Clause 74 : Orders and regulations
	Amendment 89ZB had been withdrawn from the Marshalled List.
	Clause 78 : Commencement
	Amendment 89ZC
	 Moved by Lord Hill of Oareford
	89ZC: Clause 78, page 58, line 14, leave out "(8)" and insert "(9)"

Lord Hill of Oareford: My Lords, I end with a whimper and not a bang. As noble Lords will recall, we agreed four government amendments when we discussed school inspections last week. Those amendments to Clauses 39 and 41 mean that, with the exception of the first set of regulations made under the new powers inserted by these clauses, regulations will be subject to the affirmative procedure. I refer to the amendments that I introduced in response to the points raised by the noble Lord, Lord Hunt of Kings Heath.
	The two amendments before us are consequential to those amendments and were unfortunately overlooked. Amendments 89ZC and 89ZD make minor drafting changes to Clause 78, "Commencement", so that it refers to the right subsections, including those applying the affirmative procedure. This does not affect the commencement of the clause. I beg to move.

Baroness Jones of Whitchurch: My Lords, I was trying not to get drawn into ending on a whimper as well. I was not going to say anything, because there is nothing to be said, except to thank the noble Lord for his courtesy so far. I look forward to Third Reading in due course.
	Amendment 89ZC agreed.
	Amendments 89ZD to 91
	 Moved by Lord Hill of Oareford
	89ZD: Clause 78, page 58, line 16, leave out "(9) and (10)" and insert "and (9) to (11)"
	89A: Clause 78, page 58, line 16, at end insert-
	"( ) section (Academy orders: local authority powers);"
	89B: Clause 78, page 58, line 16, at end insert-
	"( ) section (Direct payments: persons with special educational needs or subject to learning difficulty assessment);"
	90: Clause 78, page 58, line 23, leave out paragraph (c)
	91: Clause 78, page 58, line 31, leave out "section 67" and insert "sections 67 and (Securing the provision of apprenticeship training)"
	Amendments 89ZD to 91 agreed.

NHS Commissioning Board Authority (Establishment and Constitution) Order 2011
	 — 
	Motion to Annul

Moved By Baroness Thornton
	That a Humble Address be presented to Her Majesty praying that the order, laid before the House on 15 September, be annulled (SI 2011/2237).

Baroness Thornton: My Lords, in moving the Motion on the NHS Commissioning Board Authority (Establishment and Constitution) Order 2011, I will also speak to the NHS Commissioning Board Authority Regulations 2011.
	These statutory instruments were laid before Parliament on 15 September, and the date when they expire is therefore 10 November. However, the NHS Commissioning Board Special Health Authority website says that it was,
	"established on 31 October 2011",
	and plays,
	"a key role in the Government's vision to modernise the health service".
	Technically speaking, the NHS Commissioning Board has not jumped the gun by broadcasting its existence before the parliamentary process has been completed. However, given the whole way in which the change agenda for the NHS is progressing, there is an extent to which I feel our views may not count for very much at all, and may count for less as time goes on.
	I would like the Minister to clarify whether there was a period of consultation before the order was laid, because I can find no evidence of it. I am aware that there was a statutory period of consultation with the staff unions during the summer under Section 28 of the National Health Service Act 2006. I am also aware that there was a consultation on the White Paper published last year. However, I am not aware that the decision to establish a shadow authority was taken or mentioned during that consultation.
	The Explanatory Notes to the statutory instruments make play of the fact that the Future Forum said in its deliberations that the NHS Commissioning Board should be established as soon as possible. However, I do not regard the deliberations of the Future Forum as a substitute for a properly managed consultation involving all the bodies that have an interest in this matter. The Future Forum is a body with no official or statutory status or accountability to Parliament. Its members have not been appointed through the Nolan procedures and do not even need, for example, to register their interests. Praying them in aid of an order before Parliament is slightly odd.
	The procedure for putting in motion important statutory instruments such as this should not be treated in a cavalier manner. Indeed, it is so important that there was an exchange of letters between the noble Lord, Lord Goodlad, the chair of the Merits of Statutory Instruments Committee, and the Leader of the House, the noble Lord, Lord Strathclyde, last summer when a matter of consultation was clarified. In answer to a question from the noble Lord, Lord Goodlad, about the consultation procedures, the Leader of the House said:
	"The Government recognises the best practice established by the Code of Practice on Consultation and will continue to observe it wherever possible".
	I am concerned as to whether the code of practice was adhered to in this case, and if not, why not.
	This order outlines how the proposed new commissioning architecture for the NHS might be delivered, so it is of huge importance. I would like some assurance from the Minister that, as we move forward with other orders pertaining to the Bill, proper consultations will take place.
	Today, as the NHS Commissioning Board commences a period of shadow running before becoming fully operational, the emergent commissioning architecture has become far more complex. The paper developing the NHS Commissioning Board offers some insights as to what a very complex organisation is being developed. Between the NHS Commissioning Board at one end and the clinical commissioning groups at the other, the variety of commissioning support agencies is growing exponentially to include regional-I think I need to amend that to subnational-arms of the NHS Commissioning Board, PCT clusters, commissioning support units, clinical senates, special clinical networks, health and well-being boards and trustees of clinical commissioning groups. Public Health England, local health improvement boards, regulators such as Monitor and the Care Quality Commission, the National Institute for Health and Clinical Excellence, local GP councils, third sector suppliers, and individual practices that are enrolled as clinical commissioning group members can also be added to this list. Indeed, patients too are becoming commissioners, as they wield personal health budgets.
	This is presumably the structure to be delivered by the shadow board. I do not object to being properly prepared for these huge changes-that is very wise. However, there are some very important questions to be considered about the statutory instruments before us today. Can the Minister confirm what the timetable is, subject to the passage of the Bill? My understanding is that October 2011 is the start date for the board in shadow form as a special health authority, although the word "shadow" appears nowhere that I could find on the website. Given that the board has already recruited its chair-a matter that I will return to in a moment-can the Minister tell the House how and when other board members will be recruited, and whether the Department of Health will be using the same company of head-hunters that recommended Professor Malcolm Grant? Can he confirm that another five board members will be appointed? I am asking because I am not clear from Regulation 6 of the NHS Commissioning Board Authority Regulations, on the suspension of non-officers, as to whether that includes the chairman. I can see that it deals with the situation of the suspension of the chairman, but I am unclear as to how the chairman might be suspended in the first place, and by whom.
	If the shadow board is to run from October 2011 to October 2012, I gather that at that point it transmogrifies into an executive non-departmental public body responsible for planning for 2013-14. I ask the noble Earl: is that it then? Is that the status of the quango being created to run this part of the National Health Service? We know that strategic health authorities and PCTs will be disestablished in April 2013.
	I have a series of questions arising from the timetable, and I am sure other noble Lords will have as well. I am going to limit myself to two main themes, accountability and cost, after which I will have a few questions about the appointment of Professor Malcolm Grant. What powers does the NHS Commissioning Board have at this point and what budget? How many people are employed by it at present, how many will be employed by it eventually and at what cost? We know that the board will be responsible for £100 billion of taxpayers' money. When will they start disbursing that funding and what accountability measures will have been established before April 2013, or indeed before October next year? Am I right in thinking that from yesterday the board has been established as an independent statutory body with some accountability, such as the authorisation of clinical commissioning groups? If this is indeed the case, does the new board have control of the budgets that develop the clinical commissioning groups? How will it disperse that funding? Who will be responsible for the strategic health authorities and PCT boards and their continuing delivery of healthcare in their areas? Who will be responsible for the delivery of the Nicholson challenge while Sir David Nicholson is busy, presumably, with all of the above?
	I turn now to the appointment of Professor Malcolm Grant, whom I know from my work with academic organisations in the past. I have the highest respect for his current position as the head of University College London, but I think he was put in an impossible position by the Department of Health. I have now read the transcript of his interview with the Health Select Committee, where he was approved only by the casting vote of the chairman. It seems clear to me that Professor Grant had been told that it was a rubber stamp exercise and that he did not expect to be cross-examined in the robust way in which the Health Select Committee proceeded to question him-a way that we all know and cherish, particularly when a Select Committee may suspect that it might be being taken for granted.
	It is unfortunate that Professor Grant was unable to explain why or if he had a passion for the National Health Service. He said:
	"I find it difficult to demonstrate because I am not a patient of the NHS".
	Will the Minister take this opportunity to clarify exactly what was meant by that remark? It has had negative media coverage because it has been interpreted as meaning that Professor Grant does not use the NHS at all. That is most unfortunate.
	According to the record, Professor Grant instead pointed to his 37-year marriage to a central London practice GP as his experience of the NHS. I am married to a world expert on internet safety, but it has given me neither a passion for nor a particular knowledge of IT and the internet. Much as I support my husband in his work, I am not at all sure that it is good practice to use that in a job interview. However, it raises a separate question: did the department take legal advice about whether Professor Grant's GP wife makes him a relevant person in terms of conflicts of interest? Given that GP primary care will be dealt with directly by the NHS Commissioning Board, which I understand is to have responsibility for GP contracts, will Professor Grant have to exclude himself from any discussions and decisions that might be to the advantage or disadvantage of GPs? What a curious state of affairs that would be. In fact, the whole episode is curiouser and curiouser.
	I agreed with Professor Grant in his remarks to the Select Committee about the health Bill, which he thought was completely unintelligible. I suspect that the Minister may not. I look forward to the Minister's remarks because I know that I will be wiser as a result. I beg to move.

Lord Warner: My Lords, I agree with everything my noble friend has said. In particular, I would like to know when the shadow becomes substance.
	It is unfortunate that we are considering these statutory instruments before we have had a chance in Committee to discuss the clauses of the Bill relating to the NHS Commissioning Board. I shall try not to trespass on the ground that we will undoubtedly cover in the Bill, but there will inevitably be some overlap.
	The board's main role is to ensure a coherent and effective commissioning system as a proper counterbalance to the NHS's historical dominance by provider interests. In considering these statutory instruments, it is important that we are clear that this is its main role. If it is to succeed in using commissioning to improve patient health outcomes, not only individually but across populations, it will be vital that the board is not sidetracked by being given other roles that Minister's cannot find other homes for. We will discuss these issues further, but can the Minister give some assurances today that we will not end up with a situation in which the board's empire continues to grow and its membership may not be the most effective to deal with the range of circumstances and problems that it has to deal with? Can he give an idea of the scale of the board's budget and staffing issues?
	I always travel optimistically when I see a government department produce an impact statement and I always hope that there might be the odd number or two in it. However, in these statutory instruments, the numbers are conspicuous by their absence. I would therefore like to explore with the Minister what the scale of the board's budget and staffing will be.
	It is very difficult to judge whether the governance arrangements for the board in regulations such as these are satisfactory without knowing a lot more about the scale of the operations. Could the Minister give us more information about what he anticipates the budget of the board will be in its first year of operation? Again, we are less than certain precisely when that first year of operation will be, but for argument's sake let us fix on either 2012-13 or 2013-14-I personally do not mind which. I would like to know what he thinks this body will be responsible for in cash terms and to have some idea of what he thinks its running costs will be. We will certainly be coming back to this issue as the Bill progresses in Committee, but it would be helpful to have some idea of the scale of this body's operation before we can judge whether the provisions in the regulations on membership of the board and the way in which it is going to be run are adequate.
	This request for numbers is not just a matter of idle curiosity on my part. It relates to the question of what is the most appropriate size for this board and its committee structure. From what we have learnt so far, the board seems likely to have responsibility for spending at least £80 billion a year. I have heard figures of up to 5,000 staff being bandied about as the possible number of people that the board will employ. With an annual expenditure of this size, my first question to the Minister is: is it right to be thinking about having a board with only five non-executive members? How does this compare with a FTSE 100 company with a similar turnover? With such a turnover each year, what is likely to be the scale and nature of the committee and sub-committee structure that the board requires? Is there a danger that, with only five non-executives, the board will end up with committees or sub-committees taking decisions on large sums of public money where board non-executives are in a significant minority in those decision-making committees? Certainly at first blush, the governance structure for the large sums of public money that this board will be disposing of looks potentially weak compared, for example, with a big local authority. Are the Government sticking with five non-executives or do they contemplate having a larger number of non-executives on this board?
	Having made this comparison with local government, I will turn to the issue of the board and its committees meeting in public. As I understand the regulations, there is no requirement for the board or its committees to meet in public other than when the board presents its annual report. Given the sums of public money likely to be involved, this seems to me totally unsatisfactory. As someone who was a chief officer in a big local authority for six years, I thought it was good for my soul to have to argue my case in public. I think most members of elected local authorities accept that their way of having to account for large sums of public money is to talk about how it is going to be spent and to account for it in a public arena. I cannot see why this board should not be required, as a matter of course, to meet in public and conduct its discussions in a transparent way, except where perhaps personnel or commercial issues are involved. Can the Minister say why the regulations do not require this, when the Government themselves tend to make rather a song and dance about how they prefer there to be much more transparency in public bodies?
	Finally, I turn to the issue of board competence and training. I was a little startled to learn of some of the answers provided to the Health Select Committee by the Government's candidate to chair the board. Of course, there was a refreshing honesty, as my noble friend has said, about the way he described the Bill as "completely unintelligible", and many Members of this House seem to agree with him, judging by the number of amendments that they have put down. However, more puzzling was his understanding of the board's relationship with the Secretary of State under the terms of the mandate provisions in Clause 20 of the Bill. He seemed to believe that the Secretary of State would hand over the mandate for two or three years and then leave things to the board. Clause 20 makes it absolutely clear that the Secretary of State can issue a fresh mandate before the beginning of each financial year as well as modify it, particularly when there are exceptional circumstances. The Secretary of State also has extensive powers in Clause 17 to issue regulations that lay down standing rules on how the board conducts its affairs. Can the Minister tell us more about the arrangements for induction training of non-executives and their chair, so that there is no misunderstanding on the part of the non-executives about what the board can and cannot do?
	I could go on because there were many other issues that were raised, but I will save those for Committee. In conclusion, I regard these regulations as looking somewhat feeble for a body operating on the scale that the Government seem to envisage and in such a complex environment. We will come back to some of these issues in Committee. In the mean time, I would welcome the Minister's answers to my questions.

Baroness Barker: My Lords, reading these regulations, I was taken back to 2008, when the then Government set up the Care Quality Commission. We had a set of regulations that were not dissimilar to these to start the process of establishing that board. The CQC became operational on 1 April 2009; its chair was appointed on 15 April 2008 and spent a year in the process of setting up that body. Noble Lords who took part in the legislation around that discussion will remember that we had not begun the Committee stage when the chair was appointed, and there were in subsequent weeks major discussions about the role of the CQC board, its objectives and its composition, all of which were subsequently translated into legislation and regulations and which today carry through into the CQC.
	Echoing some but not all the questions asked by the noble Baroness, Lady Thornton, and the noble Lord, Lord Warner, I too want to ask the Minister whether, as with the setting up of previous bodies, it is the intent that there should be an initial process when a basic structure for establishing the body takes place, and whether it will be added to and changed as the legislation governing the body goes through Parliament. I too want to know whether this board will be required to meet in public, if that is the outcome of the debates that your Lordships are due to have in the next few weeks on the legislation. Also, is it a de minimis position to have five members? That might well be changed in future. Like the noble Lord, Lord Warner, I want to understand the scale of the budget and staffing structure that this board has to oversee.
	Can the Minister say more about conflicts of interest? In these regulations, we have a clear but standard definition of conflict of interest, which is about pecuniary interests of board members. This board is going to operate in relation not just to the Secretary of State but to clinical commissioning groups, which opens up the capacity for there to be different conflicts of interest other than direct pecuniary ones, which I imagine that the Government can foresee and would wish to prevent. Would it be reasonable for noble Lords to assume that as the legislation progresses matters like that will be decided and will be the subject of further regulation?
	Finally, how long does the department believe the process of transition will take and who will be responsible for monitoring the cost of the establishment of what I take to be a shadow board, which, as I said, is not an unprecedented step for a Government to take in a matter such as this?

Lord Turnberg: My Lords, many of the points that I might have raised have been raised by my noble friends, but I still have some concerns and quite a lot of confusion as to what this body will do. Will it have budgetary responsibilities from day one and, if not, when will it start having some responsibilities for the huge amount of money at its disposal? What controls will be placed upon it? If it is going to meet in public only occasionally, who will take it to account if things seem to be going wrong? What role will the Secretary of State play if it does not seem to be delivering what it should? It has an enormous set of responsibilities. Will it have sub-committees or will it be decided, among the five non-execs and others, how it will go about its business? I find the whole thing rather confusing at this stage. It would be nice to have some clarity and I hope that the noble Earl will be able to give it.

Lord Willis of Knaresborough: Perhaps I might say first to my noble friend that I support and appreciate the idea of bringing forward a special health authority to shadow the new Commissioning Board. That is right and proper but, like other noble Lords, I think the idea of doing that is a little confusing before we have had a chance to examine this proposal in Committee, and to test it against the large number of amendments which are coming in to tease out what the Commissioning Board will ultimately perform and what its form and functions will be.
	I do not want to add to the questions asked by my noble friend Lady Barker, the noble Baroness, Lady Thornton, and the noble Lord, Lord Warner, all of which I am sure the Minister will get to in his response, but I particularly want to raise one issue with my noble friend. It is the question of research; he will not be surprised that I have raised that. In another place, the Government conceded that research ought to be put into the Bill and that it will be a duty not only of the Secretary of State but of the Commissioning Board and commissioning groups to promote research. At the moment, research within the NHS is of course promoted by the Chief Medical Officer of health, who has responsibilities for the National Institute for Medical Research. To be fair, I think that Sally Davies carries that job out very well indeed. She has done a remarkable job since the Cooksey report and the setting-up of OSCHR with the identifying of resources within the NHS for research. We are starting to see the fruits of that work; indeed, during the passage of the health Bill I hope to be able to speed up the process of getting a special health authority for research and, ultimately, a new research authority.
	However, will this shadow authority have a duty to commission research? In which case, will that budget be within the £80 billion to £100 billion identified by noble Lords? Will it in fact take over the duties currently held by the Chief Medical Officer, Sally Davies, or will she continue to retain them and report to the Commissioning Board? In short, where will NHS research reside and who will have authority for it in making the decisions within the new arrangements?

Baroness Finlay of Llandaff: My Lords, I too would like to ask a question in relation to conflict of interest. As the noble Baroness, Lady Barker, has said, it seems that conflict of interest is much more likely to be in the non-financial sphere than the financial sphere. Would members of the board be expected to declare it, perhaps particularly in relation to their own health and that of members of the family who may be affected by commissioning decisions? Also, who will the Commissioning Board be required to take advice from in its commissioning decisions and who will it be required to work with? Will education and training, just as with research, actually become a core duty of the Commissioning Board at the outset or will it come along later? I note that it is said that this is a transition process and that the Commissioning Board will ultimately have responsibility for primary medical services. However, I would be grateful if the Minister could explain at what point that transition will occur, whether it will be phased across the country gradually or happen all in one go, and what plans are being made for the potential risks that can occur with such a major transition of funding from the current system, with the whole of primary medical services being taken over by the Commissioning Board.

Earl Howe: My Lords, I welcome this, the second in a series of debates tabled by the noble Baroness, Lady Thornton, scrutinising various pieces of secondary legislation which together are intended to provide continuity and security to NHS staff, as well as maintaining the continuity and quality of NHS services, and delivering the £20 billion efficiency challenge.
	This second debate provides an opportunity for me to set out the need for a proposed new preparatory body to ensure the most effective transition to a new system for commissioning NHS services. As noble Lords will know from our debates on the Health and Social Care Bill, a key part of the Government's agenda is to turn the NHS into a more patient-centred organisation, with a clearer focus on improving patient outcomes, and designed around the needs of the local population.
	The Government intend to create a more autonomous and accountable NHS, with greater clarity about the roles and responsibilities of different organisations for provision of commissioning. A stronger, more effective commissioning system is necessary to support the improvement in health outcomes that we all want to see. An autonomous but accountable NHS Commissioning Board is a key component in the realisation of this objective.
	The NHS Commissioning Board will be rigorously held to account by Ministers and Parliament as a whole for delivering improved patient outcomes instead of top-down process targets. While it will be free from interference on a daily basis from Ministers, it will have clear duties set out in primary legislation, and will be held to account for objectives set by the Government through an annually refreshed mandate, giving it a clear long-term direction.
	The board will allocate resources to clinical commissioning groups and support them to commission services on behalf of their populations, according to evidence-based quality standards. It will directly commission services in six areas: specialised services, primary care, specialised dental services, military health, prison health and some aspects of public health. It will develop a high-quality market for commissioning support, while minimising redundancy costs, living with reduced running costs and retaining the best of NHS talent. This means that the board will be at the centre of delivering improved, patient-centred services while cutting waste and bureaucracy.
	It is essential that we get this right. With this in mind, the NHS Future Forum has recommended that,
	"the NHS Commissioning Board should be established as soon as possible to ensure focused leadership for improving quality and safety as well as meeting the financial challenge during the transition".
	This shows that there is a recognised need to begin work now to ensure that the transition arrangements to the new system allow the NHS Commissioning Board to undertake its full responsibilities from the day it is established.
	The NHS Commissioning Board Authority, as established in the statutory instruments that we are debating tonight-as well as the functions which were not laid before this House, but noble Lords may have seen earlier this week-is a preparatory vehicle, which will allow the organisation to recruit a leadership team; establish robust governance processes; develop an open and supportive ethos and culture; and begin to develop some of the key relationships with other organisations in the system. It will take on only limited functions, delegated by the Secretary of State for Health, with regard to the health system during the course of 2012.
	The authority will ensure that the NHS Commissioning Board is able to function as intended as soon as it is established as an executive non-departmental public body, subject to the passage of the Bill. The authority will help the NHS to manage some of the challenges of the transition from the current system to the new one. Through establishing a body at arms' length from the department, we can ensure robust accountability and governance arrangements.
	There will be a letter from the Secretary of State setting a series of objectives that the special health authority will be expected to deliver. In addition, there will be a framework agreement defining the relationship between the Department of Health and the authority. This provides a level of transparency that would not have been present had this preparatory phase been handled wholly in-house. The authority will have an accounting officer who will be accountable to the department, and the Public Accounts Committee, giving Parliament and the Secretary of State for Health clear access to officers responsible for the major decision-making within the board.
	Establishing an arm's-length body also allows us to recruit a strong leadership team, who can provide strategic input and challenge. Wherever possible, we have drafted the establishment legislation for the special health authority to reflect the legislation that noble Lords have been scrutinising in this House. This has been done to build in continuity wherever possible, particularly around the balance of the board. Officials have sought and received the approval of the Appointments Commissioner to roll over the key non-executive director appointments to provide continuity of leadership as the body moves from being a preparatory one to an operational one, subject again to the passage of the Bill. The preparatory arrangements will ensure that the culture of national and local accountability is embedded in the board from an early stage, and does not see the centrally administered, top-down, performance-managed culture merely transferred into the board on the date of establishment, by transferring all staff and working practices on day one.
	We have taken our administrative responsibilities extremely seriously during this process. We have been careful to balance appropriately the need for transparent and accountable preparatory arrangements, while ensuring that we still respect Parliament's role in scrutinising the legislation for which these regulations prepare. Establishing a special health authority at this stage does not pre-empt the Bill's progress through this House. It is intended as a short-term measure. The Secretary of State for Health can abolish the authority, subject to consultation with staff and parliamentary scrutiny. We are working to ensure that the costs of establishing the body are kept to a minimum, and the body will employ only staff whose roles are considered business-critical to its preparatory functions. The Government are committed to creating an NHS that is able to shape health services that are patient-centred and locally accountable. The NHS Commissioning Board Authority is a key step in this process.
	I shall now address the specific questions raised by noble Lords in this debate. I was very grateful to my noble friend Lady Barker for reminding the House of the legislation passed under the previous Administration in relation to the establishment of the CQC. That is not an unreasonable comparator to the present situation. The orders before us do not pre-empt the outcome of the scrutiny of the Health and Social Care Bill. There are good reasons for establishing the authority now. They are, in sum, to ensure to strong governance around the organisation's preparations; to identify and induct a strong, independent board who could lead the NHS Commissioning Board, subject to the passage of the Bill; and to provide an important signal to the NHS about the future.
	I say to my noble friend Lord Willis that this legislation is not subject to the successful passage of the Bill. It is a supporting measure, which could be reversed or amended as necessary, subject to consultations with affected staff. The functions of the authority, which are outlined in directions issued by the Government, could be updated as the Bill progresses.
	The NHS Commissioning Board Authority was established as a special health authority yesterday. As I say, it will have a preparatory role and will be replaced by an executive non-departmental public body by October 2012, subject to the passage of the Bill. It is expected to be fully operational by 1 April 2013.
	The noble Baroness, Lady Thornton, asked me about consultation on the setting up of the special health authority. Section 28 of the NHS Act 2006 is the basis for establishing special health authorities. The Act requires consultation with staff, which was carried out. It does not require consultation with others. As stated in the government response to the Future Forum report, the authority-the preparatory body, in other words-will continue operating until the provisions of the Bill relating to the establishment of the board are brought into force some time between July and October 2012. Only at this point will the full executive non-departmental public body be established with responsibility for establishing and authorising clinical commissioning groups. This would be followed in April 2013 by the executive non-departmental public body taking on its full suite of statutory responsibilities. The special health authority would therefore only have a preparatory role; it is currently envisaged that it will exist for a maximum of one year. The noble Baroness, Lady Thornton, asked a number of questions about the powers of the special health authority: how many would be employed; how many would be recruited and at what cost.
	In order to prepare for the establishment of the board, we have established this authority with the purpose of developing the details around the processes and relationships required to carry out the board's functions, developing the business model, and making such other practical arrangements that are necessary and appropriate for the effective running of the board on its establishment, including developing HR and governance models. I would simply say to the noble Baroness, Lady Finlay, and indeed my noble friend Lord Willis that that encapsulates the functions of the authority. The functions of the board are of course subject to the passage of the Bill and not dealt with in the orders that we are currently considering.
	As regards staff, the publication of the NHS Commissioning Board People Transition Policy in July 2011 gave staff in relevant bodies, including PCTs, SHAs and arm's-length bodies in the Department of Health, a description of how the NHS Commissioning Board would manage the transfer of functions and staff from other organisations. While further detailed work will need to be undertaken during the preparatory phase on the detail of transition, the People Transition Policy was able to set out how transfers will be managed and appointments will be made. The chair, as the noble Baroness mentioned, has been appointed-Professor Malcolm Grant. Other non-executive board members are recruited by the Appointments Commission; however, the department has used the intelligence gathered by the recruitment company to aid this process. The chair will lead the recruitment of other board members.
	Recruitment to the NHS Commissioning Board is being managed in two phases. This phased appointment process will allow the senior leadership team to help take the NHS Commissioning Board forward, together with their support teams and some key transition and priority roles, while more of the work on the detailed structure is carried out. The immediate priorities for appointments as part of the first phase for recruitment are: first, the senior team and their support staff; secondly, the transition functions; thirdly, functions that have early deadlines; and, fourthly, transfers from organisations that may not be sustainable until October 2012.
	The noble Lord, Lord Warner, asked about induction training of non-executives and the chair. An induction process has been developed for the chair by the authority transition team. It will also be adapted for the non-executive directors. The noble Lord also asked a series of questions about the budget of the board during its first year; what it will be responsible for in terms of that budget and about the number of non-executive directors.
	The preparatory NHS Commissioning Board Authority has access to a transition budget of up to £6 million during the financial year 2011-12 to establish itself and to undertake consultation and analysis to design its future functions. This excludes staff costs and capital expenditure on estates and infrastructure-

Lord Warner: That was not the point of my question. It was what the board budget was going to be, so that we knew what this authority was preparing itself for. I am not frankly very fussed about the odd million or two going to this authority. I am more concerned about how it prepares itself for the transition to the board if it does not know what the expenditure and scale of the board's operation is going to be.

Earl Howe: My Lords, I appreciate that and I was coming on to providing him with the answers to those questions. The impact assessment published alongside the Bill includes an analysis of the costs and benefits of establishing the NHS Commissioning Board. Preliminary estimates for the annual running costs of the board are in the region of £400 million. That budget will, of course, be partly dependent on the detail of secondary legislation that will be subject to parliamentary scrutiny.
	The noble Lord expressed concern that we should not end up with a board that is too large and with the wrong membership for the remit placed upon it. We need here to distinguish between the role of the authority and that of the board. The authority has a clearly defined preparatory role. It is not responsible for commissioning in the NHS but rather for preparing for the establishment of the NHS Commissioning Board. The board will, when fully established, be responsible for the £80 billion commissioning budget.
	As regards who will sit on the board when it is in its fully fledged form, the Health and Social Care Bill sets out details of the proposed membership of the board, including a chair and at least five non-executive directors, along with fewer executive directors than non-executive directors. The Secretary of State will appoint the chair and non-executive directors, and has identified Sir David Nicholson as the first chief executive designate. The board will appoint the executive members other than the first chief executive. As an autonomous body, the board will be free to appoint board members and, in turn, other staff below board level.
	The noble Lord, Lord Warner, asked me to outline what the board will do with the money that it receives from the Government. The board will directly commission a wide range of services, including local primary care and the most specialised services in the country-meaning that the board will have direct responsibility for around £20 billion of commissioning spend. It will be accountable nationally: for the outcomes achieved by the NHS, which will be set out in the Government's mandate to the NHS Commissioning Board; for contributing to improving broader public health outcomes; for how the NHS commissioning budget of around £80 billion is spent; and for maintaining financial control across the system.
	As regards how the NHS Commissioning Board Authority will be held to account, the authority will operate in line with the establishment order, regulations and directions set by the Secretary of State. The Secretary of State will issue a letter as guidance under the directions setting out more specifically the priorities against which the special health authority board will be held to account. The Department of Health's Permanent Secretary is its principal accounting officer. She will appoint the special health authority's chief executive as its accounting officer. The principal accounting officer has responsibility to Parliament for overall expenditure in relation to the department and its arm's-length bodies-thus making sure that an overall system of control is in place for ensuring proper stewardship of public funds and the issuing of grant in aid to the special health authority.
	The noble Lord, Lord Warner, referred to the issue of the board meeting in public. The authority is not required to meet in public. The board is required to meet in public, subject to the passage of the Bill- I refer the noble Lord to paragraph 7 of Schedule 5. The authority is a preparatory body, and there is therefore a stronger case for the board rather than the authority to meet in public. The framework agreement between the department and the authority that we expect to be published in the coming weeks includes a commitment by the authority to carry out its activities transparently.
	My noble friend Lord Willis asked whether the shadow authority will have a duty to commission research and whether it will take over the duties of the Chief Medical Officer. The authority, as I think I have made clear, will not commission research. The NHS research strategy policy will remain in the Department of Health until the board is established. The board, as my noble friend knows, will be under a duty to promote research.
	The noble Lord, Lord Turnberg, asked further questions about the accountability of the board and the role of the Secretary of State, and whether there will be sub-committees. The executive officers of the authority and the board will account to their chair and the board. The Department of Health will hold the authority and the board to account. The Bill places the Secretary of State under a duty to keep the performance of the board under review-that is stated in Clause 49. The Secretary of State will set an annual mandate for the board, and the board is also accountable to Parliament in its annual report.
	The noble Baroness, Lady Thornton, referred to the appointment of Professor Malcolm Grant as the chair of the authority. Professor Grant was selected as chair of the NHS Commissioning Board because he was the best candidate for the job. His experience as the head of an internationally respected organisation such as UCL means that he is highly qualified, and his appointment is backed by the Health Select Committee. I understand that when he remarked to the Health Select Committee that he was not an NHS patient, he was simply referring to the fact that he is not ill and is therefore not currently an NHS patient. I understand that he is registered with an NHS practice.
	I think that I have covered all the questions that have been asked of me. I have certainly endeavoured to do so but if I have failed to answer any, I shall of course write to noble Lords.

Baroness Williams of Crosby: My Lords, perhaps I may just draw the Minister's attention to the point raised by the noble Baroness, Lady Finlay, concerning pecuniary interests. In Regulation 13(4) of the NHS Commissioning Board Authority Regulations, there is an indication that the Secretary of State may be able to decide that somebody suffers from a disability because of his pecuniary interests. From that, can we assume that if any member of the authority has a pecuniary interest in a particular contract or a particular outcome, he or she will be expected to make their interest absolutely clear and to excuse themselves from the decision?

Earl Howe: My Lords, yes. There are clear rules surrounding conflicts of interest and the NHS Commissioning Board will be no exception to the rules that already exist for public bodies.

Baroness Thornton: My Lords, I thank the Minister for that very comprehensive answer to the debate. I also thank all noble Lords for their contributions to what I think was a very worthwhile discussion. I particularly thank my noble friends Lord Warner and Lord Turnberg. The questions put by my noble friend Lord Warner were, of course, as forensic as I would have expected. I did wonder about the lack of an impact assessment being attached to the order and regulations.
	In response to the noble Baroness, Lady Barker, I did not object to the fact that the chair has been appointed in advance. Indeed, I completely took the point that it is happening at almost exactly the same stage in the passage of the Bill as occurred with the appointment of the chair of the CQC. However, my concern relates partly to the lack of consultation. We conducted a consultation at every single point of the CQC being set up. We carried out a statutory consultation right the way through the establishment of that body. The fact that the Government were not bound to have a consultation prior to the establishment of this authority is not an excuse for not doing so. This authority will lead to the establishment of a board which will spend £90 billion or £100 billion of taxpayers' money. Therefore, it seems important to have a consultation at every point, partly because the more that people understand organisations, the more that helps to build support for them.
	The noble Lord, Lord Willis, is quite right to raise the issue of research. These Benches certainly support that, if that is not the kiss of death.
	The noble Baroness, Lady Finlay, raised a crucial point about conflicts of interest. I am not at all sure that the Minister answered my question about legal advice on the position of the wife of the new chairman of the authority being a GP but I am quite happy to let him write to me about that. On that basis, I beg leave to withdraw the Motion.
	Motion withdrawn.

NHS Commissioning Board Authority Regulations 2011
	 — 
	Motion to Annul

Tabled By Baroness Thornton
	That a Humble Address be presented to Her Majesty praying that the regulations, laid before the House on 15 September, be annulled (SI 2011/2250).
	Motion not moved.
	House adjourned at 9.05 pm.